Compliance and Auditing Financial Reporting Compliance 1

Question 1

Which accounting standards are publicly traded US companies required to use for financial reporting?

Accepted Answer

GAAP (Generally Accepted Accounting Principles)

Answer

IFRS

Answer

GASB Standards

Answer

FASAB Standards

Question 2

What is the purpose of management's discussion and analysis (MD&A) in an annual report?

Accepted Answer

To provide management's perspective on financial results, trends, and risks

Answer

To summarize the audit opinion

Answer

To list all company officers and directors

Answer

To document internal control weaknesses

Question 3

What is 'earnings management' in the context of financial reporting compliance?

Accepted Answer

Manipulating financial results within or outside GAAP to achieve desired outcomes

Answer

Setting annual earnings targets for employees

Answer

Managing investment portfolios

Answer

Tracking earnings per share over time

Question 4

Which SEC filing must publicly traded US companies file annually with audited financial statements?

Accepted Answer

Form 10-K

Answer

Form 8-K

Answer

Form 10-Q

Answer

Form S-1

Question 5

What does 'revenue recognition' compliance require under ASC 606?

Accepted Answer

Recognizing revenue when performance obligations to customers are satisfied

Answer

Recording revenue when cash is received

Answer

Recognizing revenue when contracts are signed

Answer

Recording revenue at the end of the fiscal year

Question 6

What is the role of an external auditor in public company financial reporting compliance?

Accepted Answer

Providing an independent opinion on whether financial statements present fairly in accordance with GAAP

Answer

Preparing the financial statements

Answer

Setting accounting policies for the company

Answer

Approving all significant transactions