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CPA Australia CPA Financial Accounting and Reporting Exam Sample Questions (Q52-Q57):
NEW QUESTION # 52
Which one of the following examples would not represent an agency cost?
- A. the cost of preparing a cost-benefit report for a new project
- B. the cost of engaging an external auditor
- C. the cost of employing an internal auditor
- D. the cost of preparing a financial report for shareholders
Answer: A
NEW QUESTION # 53
As per the International Accounting Standards Board conceptual framework, which of the following holds the primary responsibility for preparing and presenting financial statements?
I)owners
II)auditors
III)directors
- A. III only
- B. II and III only
- C. I and II only
- D. I only
Answer: A
NEW QUESTION # 54
X was influenced by G Co's audit report and dividend declaration, and decided to invest in the securities of the company. What should X be cautious about before investing in the shares of the company?
X should be aware that
- A. the auditor's report is influenced by the directors.
- B. the declaration of dividends assures high earnings per share.
- C. the auditor's report refers to the company's prior year financials.
- D. a declaration of dividend is the ultimate measure of a company's profitability.
Answer: C
NEW QUESTION # 55
The two fundamental qualitative characteristics of the financial information are
- A. relevance and comparability.
- B. faithful representation and comparability.
- C. relevance and faithful representation.
- D. verifiability and relevance.
Answer: C
NEW QUESTION # 56
Financial information is reliable if it
I)prefers substance over legal form.
II)is neutral and without any material error.
III)is complete and has been made with prudence.
IV)is understandable to those with no knowledge of accounting.
- A. II, III and IV only
- B. I, II and III only
- C. I, II and IV only
- D. I, III and IV only
Answer: B
NEW QUESTION # 57
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