ESSAY

The IASB Framework four principal quantitative characteristics, understandability, relevance, reliability
and comparability. Explain the meaning of each of these characteristics
a
Understandability
Kerangka konseptual akuntansi dapat mudah dipahami oleh pemakai
b
Relevance
informasi akuntansi harus mampu membuat perbedaan dalam sebuah keputusan.
c
Reliability
Informasi dianggap andal jika dapat diverifikasi, netral, disajikan secara tepat serta bebas dari
kesalahan dan bias (penyimpangan).
d
comparability
Perbedaan-perbedaan seharusnya tidak mengakibtakan perlakuan akuntansi yang berbeda
While proponents of current cost accounting are convinced that it provides more useful information than
historic accounting, they do not agree on all issues. In general supporters can be divided into two camps.
a
Those who believe in the financial capital concept, and
b
Those who believe in the physical concept
Explain the differences between two concepts and the arguments for and against each viewpoint stating
which you approach you believe is most valid.

Konsep modal financial merupakan cara pandang tradisional dimana melihat modal berdasarkan jumlah investasi
yang terdapat dalam perusahaan tersebut. Return financial konsep merupakan kelebihan jumlah uang modal pada
akhir priode dikurangi dengan jumlah uang modal diawal priode, termasuk efek dari transaksi dengan pemilik.
Dengan kata lain telah terjadi peningkatan nilai modal uang
Konsep modal fisik melihat modal berdasarkan aspek fisik yang kemudian di rubah menjadi sejumlah uang,
biasanya aspek fisik berhubungan dengan kapasitas produksi perusahaan, Return modal fisik dihasilkan hanya jika
kapasitas produksi fisik di akhir priode lebih dari kapasitas produksi diawal priode, termasuk transaksi dengan
pemilik. Hanya current cost or replacement cosy yang relevan digunakan berdasarkan pandangan modal fisik.
Perbedaan utama antara keduanya adalah penempatan dari perubahan harga aset non-moneter dan hutang jangka
panjang selama periode. Dibawah tampilan modalkeuangan, perubahan harga ini termasuk keuntungan sebagai me
megang keuntungan/kerugian. Dibawah tampilan modal fisik, ditempatkan langsung ke ekuitas
pemegang saham sebagai penyesuaian modal pemeliharaan/ capital maintenance adjustment

3
4

Explain and discuss how an asset can provides future economic benefit. Refer to both profit seeking and
not for profit organization.
Technically, what do we mean when we say X was measured? How is a scale related to the process of
measurement ?

jika kita mengatakan X diukur berarti beberapa angka telah ditetapkan kepada x, dimana kita mengukur x dimana
x merupakan karakteristik sesuatu. Misalnya X merupakan pendapatan Y company. Biasanya kita meghitung x
karena ada keterkaitan dengan masalah yang dialami oleh perusahan Y
setiap pengukuran menggunakan skala untuk menciptakan serangkaian angka, sehingga dapat memudahkan

Y company, maka kita

menggunakanan angka untuk menunjukan pendapatan tersebut
dalam pengukuran. Misalnya kita akan mengukur pendapatan

Multiple Choice
1

The statement that best defines what is meant by a theory is :

a
Coherent set of hypothetical , conceptual and pragmatic principles forming the general framework for
a field of inquiry
b
A deductive system of statement of decreasing generality
c
A set of ideas used to explain real world observation
d
All of the above

Which of these is an era of accounting theory development during which the emphasis was on providing an
overall framework to explain and develop accounting practice by using the empirical analysis method?
a
The general scientific period
b
The pre-scientific period
c
The practical approach period
d
The normative period

Concentrating on decision theories and testing them on large samples of people overcomes a major
criticism of which of the following approach to accounting theory construction ?
a
The positive approach
b
The psychological pragmatic approach
c
The naturalistic approach
d
The descriptive pragmatic theory

The
a
b
c
d

statement that is false is

Normative theory rely on both semantic and syntactic approaches
Questionnaires often used by positive theorists to test accounting hypotheses
Naturalistic research starts with an accepted theory and when an anomaly occur a new
theory is developed to explain it.
Normative theorists hold the assumption that accounting should be a measurement system and that
there is only one unique profit measure

Which of these argument is not criticism of scientific method?

a
Result from scientific based research are difficult to generalize
b
Hypotheses are based on the use of share market prices or surveys which remote from the world of
practitioners
c
Large-scale statistical research tends to lump everything together
d
Hypotheses are not commensurate with the concerns of many individual accountant

Proponent of the free market approach to the provision of accounting information advocate that :
a
Market mechanisms cannot achieve are socially ideal equilibrium price for accounting information
b
Market forces can be depended upon to generate any desired information
c
The free-riders effect will result in an under production of accounting information
d
All of the above

Which of these is not an assumption underlying regulatory capture theory?

a
Politicians are not neutral arbiters
b
The government has no independent role to play in the regulatory process
c
All members of society are economically rational
d
The regulated comes to control or dominate the regulator

In relation to accounting and auditing which of these is not a theory of regulation?

a
Public interest theory
b
Life cycle theory
c
Regulatory capture theory
d
Private interest theory

Which of these factors should not affect the extent to which particular countries are able to influence the
international standard setting process ?
a
The number of accounting standards issued
b
National economic significance
c
Professional expertise
d
English language competence

10 Prior to 2005 International Accounting Standards (IAS) were influential in which of the following ways ?
i
They were adopted for use in countries without national standards
ii
They were used in the development of national standards
iii
They were used voluntarily in preparing consolidated accounts in some countries
a
i,ii,iii
b
i,ii
c
ii,iii
d
ii
CHAPTER 1

15. The statement that best defines what is meant by a theory is:
a. A coherent set of hypothetical, conceptual and pragmatic principles forming the general framework for a
field of inquiry

b. A deductive system of statements of decreasing generality

c. A set of ideas used to explain real-world observations
d. All of the above
16. Which of these characteristics is the least important for an accounting theory to be considered acceptable?
a. How well the accounting theory has been constructed
b. How acceptable the implications of the accounting theory are
c. How prescriptive the accounting theory is in relation to accounting practice
d. How well the accounting theory explains and predicts reality
17. The statement that best defines the term 'empirical analysis' is:
a. Reasoning from the general to specific statements
b. Testing the truth of a proposition by observing a subset of real world observations or events
c. Understanding practices, activities or behaviour based upon direct observations and/or
experience
d. Actions undertaken by interested parties to influence the actions or outcomes of decisions made by
others
18. Which of these is an era of accounting theory development during which the emphasis was on providing an
overall framework to explain and develop accounting practice by using the empirical analysis method?
a. The general scientific period
b. The pre-scientific period
c. The practical approach period
d. The normative period
19. The rapid increase in demand for both management accounting and financial accounting information in the
1800s can be explained by:
a. The rapid development of technology during this time
b. The 'birth' of the corporation
c. Increasing separation of business management from ownership
d. All of the above
20. Which of these would be an example of normative research (research based upon a normative theory)?
a. A researcher, through observation, documents the breeding cycle of the gnat
b. An economist develops a method of using last month's share market prices to predict unemployment
levels
c. In order to ensure consistency in schooling outcomes an education researcher recommends
that all final year school students undertake the same six subjects for assessment purposes
d. An accounting researcher predicts that auditors will perform faster audits when the audit materials are
presented in graphical rather than tabular form
21. The major focus of the normative accounting theories during the period 1956 - 1970 was:
a. Refining accounting practices
b. The impact of changing prices on the value of assets and the calculation of profit
c. Providing explanations of accounting practices
d. The broader sociological implications of accounting numbers
22. The two groups that dominated the normative period of accounting theory development were:
a. The proponents of historical cost accounting and the conceptual framework proponents
b. The critics of historical cost accounting and the conceptual framework opponents
c. The proponents of historical cost accounting and the conceptual framework opponents
d. The critics of historical cost accounting and the conceptual framework proponents
23. Which of these is one of the two main factors that prompted the demise of the normative period of accounting
research?
a. The availability of financial economic principles and testing methods
b. Severe criticisms from positive accounting theorists
c. The resurgence of behavioural research

d. The increased popularity of a conceptual framework

24. Which of the following arguments are reasons why normative theories cannot be empirically tested?
i. It is impossible to demonstrate empirically what ought to be
ii. Normative theories are based on value judgements
iii. There is no access to empirical data sets
a. i, iii
b. i, ii
c. ii, iii
d. i, ii, iii
25. Behavioural accounting research is concerned with the broader sociological implications of accounting numbers.
As such it is mainly concerned with the reactions of which of the following groups to accounting numbers?
a. Auditors and managers
b. Shareholders and government
c. Creditors
d. All of the above
26. In which of the following situations would you probably not apply a behavioural theory if you wanted to
undertake accounting research?
a. You want to know whether investors use disclosures when deciding whether to invest in a firm
b. You are interested in understanding the effect of unexpected earnings announcements by
firms on share prices
c. You want to know what factors loan managers consider when assessing the riskiness of a new client firm
d. You want to determine whether individuals are quicker at analysing financial information using graphs or
tables
27. The statement that best describes the interaction of academic and professional research interests with respect
to accounting theory, is:
a. Academic and professional research interests are incompatible as academic research centres on positive
theories which are not prescriptive
b. Academic researchers use positive accounting theories whereas the accounting profession uses
normative theories
c. While accounting profession researchers seek normative (prescriptive) theories for
accounting practice, these theories are not incompatible with academic (positive) theories
which can be used to advise accounting professionals in the development of prescriptive
practices
d. None of the above
28. Which of the following is not regarded as a period of accounting theory development?
a. The normative period
b. The pre-scientific period
c. The positive accounting theory period
d. The mixed development period
29. Select the pair of periods of accounting theoretical development that are based on a similar approach.
a. The general scientific and the positive periods
b. The normative and positive periods
c. The general scientific and the normative periods
d. None of the above
30. The statement that is not descriptive of positive theories is,
a. They are descriptive rather than prescriptive
b. They avoid making value-laden judgements
c. They explain why people behave in a certain manner
d. Their primary concern is developing policy recommendations for accounting practice
31. The research question that is most unlikely to be tested using positive methodology is:

a. Which firms are more likely to use straight-line depreciation rather than diminishing-balance
depreciation?
b. Is the quantitative data derived from given sets of operations, based on an overall
accounting theory, useful to users of financial statements?
c. How do changes in tax rules affect a firm's leverage position?
d. Are firms with more intangible assets more likely to repurchase their shares?
CHAPTER 2

14. Which of these is not a criticism of the descriptive pragmatic approach to theory construction?
a. It does not allow for accounting techniques to be challenged
b. Some of the users of accounting information may be illogical in their responses
c. The focus is on the accountant's behaviour not on measuring the attributes of the firm
d. There is no assessment of whether the accountant reports in the way he or she should
15. Concentrating on decision theories and testing them on large samples of people overcomes a major criticism of
which of the following approaches to accounting theory construction?
a. The positive approach
b. The psychological pragmatic approach
c. The naturalistic approach
d. The descriptive pragmatic approach
16. Which of these statements is a criticism levelled at syntactic and semantic accounting theories?
a. There will be a great number of accounting techniques which are different but still
acceptable under general accounting principles of practice
b. The assumptions underlying the theories were rarely subjected to empirical testing
c. The theories developed are not prescriptive, that is they do not guide accounting practice
d. It does include an analytical judgement of the quality of an accountant's actions
17. Which of these is not an assumption used in normative theory construction?
a. Financial accounting is useful for making economic decisions
b. There are multiple available profit measures
c. Markets are inefficient and can be fooled by 'creative accountants'
d. All of the above are not assumptions used in normative theory construction
18. The criticism of traditional historical cost accounting that is based on a Popperian approach to science is:
a. Accounting reports prepared using traditional historical cost accounting may have perfect syntax but
little value in practice
b. The existence of accounting doublethink
c. Many of the propositions of historical cost accounting are not falsifiable
d. All of the above
19. The research question that is most unlikely to be tested using positive methodology is:
a. Which firms are more likely to use straight-line depreciation rather than diminishing-balance
depreciation?
b. How do changes in tax rules affect firm's leverage position?
c. Are firms with more intangible assets more likely to repurchase their shares?
d. Is the quantitative data derived from given sets of operations based on an overall
accounting theory, useful to users of financial statements?
20. The statement that is false is:
a. Normative theories rely on both semantic and syntactic approaches
b. Questionnaires are often used by positive theorists to test accounting hypotheses
c. Naturalistic research starts with an accepted theory and when an anomaly occurs a new
theory is developed to explain it
d. Normative theorists hold the assumptions that accounting should be a measurement system and that
there is only one unique profit measure
21. Which of these is not a criticism of the historical cost accounting theoretical model?

a. There is no independent, empirical operation to verify the calculated outputs such as 'profit' or 'assets'
b. Poor syntax whereby different types of monetary measures are added together
c. Many hypotheses associated with the model are unable to be tested as per the falsificationist approach
d. All are criticisms
22. The statement that is not descriptive of positive theories is:
a. They are descriptive rather than prescriptive
b. They avoid making value-laden judgements
c. They explain why people behave in a certain manner
d. They are concerned with developing policy recommendations for accounting practice
23. Which of these is not a typical approach to testing hypotheses under positive accounting theory?
a. Questionnaires
b. Surveys
c. Taking output data of specific accounting systems to determine whether the data helps
users to make the right decisions
d. Testing the assumed importance of accounting outputs in the marketplace
29. Which of these arguments describes the symbolic interactionists' view?
a. Behaviour will always conform to a set of behavioural rules
b. People form their own separate impressions through a process of human interaction and
negotiation
c. Reality is a concrete structure
d. Outcomes of decisions and actions are highly predictable

30. Which of these arguments is not a criticism of scientific method?

a. Results from scientific-based research are difficult to generalise
b. Hypotheses are based on the use of share market prices or surveys which are remote from the world of
practitioners
c. Large-scale statistical research tends to lump everything together
d. Hypotheses are not commensurate with the concerns of many individual accountants
31. The following research methods are used by naturalistic researchers, except:
a. Case studies
b. Experience of events
c. Syntactic model formulation
d. Exploration by flexibility
32. Which of these is the epistemology of naturalistic research?
a. Reductionism
b. Laws capable of generalisation
c. Holistic
d. Testing of individual hypotheses