Sophia Accounting Fundamentals UNIT 1 — CHALLENGE 1: Overview of Accounting
Accounting Origins and Ethics
Identify ethical principles related to accounting.
1. Which of the following statements is true regarding the regulation of ethics in accounting?
a. The Sarbanes-Oxley Act determines the standards of financial reporting for state and local
government.
b. Unethical behavior by major companies prompted the government to create the Sarbanes-Oxley
Act.
c. The private sector proposed the Sarbanes-Oxley Act as a way to regulate competition within
industries.
d. The IRS created the Sarbanes-Oxley Act in order to prosecute companies who did not pay taxes.
2. Which of the following was created by the government in response to unethical behavior by
companies such as Enron and WorldCom?
a. The Sarbanes-Oxley Act
b. Generally Accepted Accounting Principles
c. The Financial Accounting Standards Board
d. International Financial Reporting Standards
3. Which of the following statements is true regarding the purpose of the Sarbanes Oxley-Act?
a. The Sarbanes-Oxley Act standardizes accounting practices across all nations.
b. The Sarbanes-Oxley Act regulates financial reporting to prevent fraud or misconduct.
c. The Sarbanes-Oxley Act requires financial statements to be relevant, reliable and comparable.
d. The Sarbanes-Oxley Act develops and enforces securities laws.
Accounting Governance
Differentiate between governing principles, bodies, and agencies involved in regulating accounting
practices.
4. Financial reporting standards for state and local government are determined by the governing body
known as __________, while international standards are compiled in the governing principles
known as __________.
a. SEC; GAAP
b. AICPA; IRS
c. GASB; IFRS
d. FASB; GAO
5. The __________ is the governing body which investigates and reports on the use of public funds
while the __________ is the governing body responsible for collecting taxes.
a. IFRS; FASB
b. AICPA; GAAP
c. GAO; IRS
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Version | 2021 |
Release date | 2022-01-22 |
Latest update | 2022-01-12 |
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Language | English |
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