Question 1

Stakeholder theory:

Accepted Answer

A)  Has both a normative and positive version.
B)  Is completely different to legitimacy theory.
C)  Focuses on government power.
D)  All of the above.E) A) and C)
F) A) and D)

Question 2

Which of the following theories have been used to explain voluntary disclosure in the annual report?

Accepted Answer

A)  Institutional Theory.
B)  Stakeholder Theory.
C)  Legitimacy Theory.
D)  All of the above.E) All of the above
F) C) and D) D

Question 3

According to institutional theory which of the following statements is NOT true about corporate social and environmental disclosure:

Accepted Answer

A)  Within industries the nature of the disclosure is likely to diverge over time.
B)  It will be heavily influenced by regulation.
C)  Well organised external stakeholders will lead to increased disclosure.
D)  None of the above,i.e.they are all true.E) A) and B)
F) A) and C)

Question 4

Accounting theory helps us understand accounting better as:

Accepted Answer

A)  A random process.
B)  A fundamental part of the natural universe.
C)  A human endeavour.
D)  A representation of truth.E) B) and D)
F) A) and B)

Question 5

Agency theory would hold that managers on compensation contracts which have bonuses tied to a current measure of performance would prefer to:

Accepted Answer

A)  Smooth income using either expensing or capitalising.
B)  Be indifferent to expensing or capitalising transactions.
C)  Expense transactions rather than capitalise them.
D)  Capitalise transactions rather than expense them.E) B) and C)
F) C) and D)

Question 6

Key problems for owner-manager agency relationships are:

Accepted Answer

A)  dividend retention.
B)  horizon problem.
C)  risk aversion.
D)  all of the above.E) B) and D)
F) All of the above

Question 7

According to stakeholder theory accounting information:

Accepted Answer

A)  is usually misleading.
B)  is seen as largely advertising.
C)  is unimportant to most stakeholders.
D)  is an important way to communicate with stakeholders.E) B) and C)
F) A) and C) D

Question 8

A normative theory:

Accepted Answer

A)  Is based on what should be the case given a certain objective.
B)  Is completely divorced from reality.
C)  Describes,explains or predicts activities.
D)  Only focuses on normal activities.E) B) and D)
F) A) and B)

Question 9

Which of the following is NOT considered a stakeholder according to the managerial branch of stakeholder theory?

Accepted Answer

A)  Customers.
B)  Communities.
C)  Competitors.
D)  None of the above,i.e.they are all considered stakeholders.E) A) and D)
F) All of the above

Question 10

Agency theory concentrates on:

Accepted Answer

A)  two agency relationships.
B)  multiple agency relationships.
C)  one agency relationship.
D)  three agency relationships.E) None of the above
F) B) and D)

Question 11

Legitimacy theory argues that disclosure practice.

Accepted Answer

A)  The business of business is business.
B)  Organisations can only continue to exist if they demonstrate values consistent with society at large.
C)  Organisations should focus on wealth maximisation for their owners.
D)  Consumers are only interested in minimising costs to themselves.E) None of the above
F) A) and D)

Question 12

The central proposition of contingency theory is:

Accepted Answer

A)  Organisational performance depends on the fit between organisational context and structure.
B)  Institutional norms drive organisational structure.
C)  Organisational performance is largely random and poorly understood.
D)  Organisations are simply a nexus of contractual agreements.E) B) and C)
F) A) and B)

Question 13

A positive theory:

Accepted Answer

A)  Is based on what should be the case given a certain objective.
B)  Is completely divorced from reality.
C)  Describes,explains or predicts activities.
D)  Only focuses on rewarding activities.E) A) and B)
F) All of the above

Question 14

Contingency theory proposes that:

Accepted Answer

A)  Shareholder needs drive accounting system choices.
B)  Accounting policies are likely to be consistent within industries.
C)  Size is not an important factor when considering management accounting systems.
D)  No universally consistent accounting system can apply to all organisations.E) B) and C)
F) A) and B)

Question 15

Theories in accounting can help us to understand the decisions of:

Accepted Answer

A)  Financial information regulators.
B)  Financial information preparers.
C)  Financial information users.
D)  All of the above.E) B) and C)
F) A) and D) D

Question 16

Which of the following is NOT one of the four ways an organisation can obtain or maintain organisational legitimacy according to Lindblom?

Accepted Answer

A)  Change its behaviour.
B)  Change perceptions of society,without changing its own behaviour.
C)  Manipulate perceptions by deflecting attention from societal concerns.
D)  None of the above,i.e.they are all ways an organisation can obtain or maintain legitimacy.E) A) and B)
F) A) and C)

Question 17

A key underlying assumption of Institutional Theory is that people are:

Accepted Answer

A)  Risk-adverse.
B)  Self-interested.
C)  Likely to conform to external norms.
D)  All of the above.E) All of the above
F) B) and C)

Exam 5: Theories in Accounting

Stakeholder theory:

Correct Answer
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Which of the following theories have been used to explain voluntary disclosure in the annual report?

Correct Answer
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D

According to institutional theory which of the following statements is NOT true about corporate social and environmental disclosure:

Correct Answer
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Accounting theory helps us understand accounting better as:

Correct Answer
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Agency theory would hold that managers on compensation contracts which have bonuses tied to a current measure of performance would prefer to:

Correct Answer
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Key problems for owner-manager agency relationships are:

Correct Answer
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According to stakeholder theory accounting information:

Correct Answer
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D

A normative theory:

Correct Answer
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Which of the following is NOT considered a stakeholder according to the managerial branch of stakeholder theory?

Correct Answer
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Agency theory concentrates on:

Correct Answer
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Legitimacy theory argues that disclosure practice.

Correct Answer
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The central proposition of contingency theory is:

Correct Answer
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A positive theory:

Correct Answer
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Contingency theory proposes that:

Correct Answer
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Theories in accounting can help us to understand the decisions of:

Correct Answer
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D

Which of the following is NOT one of the four ways an organisation can obtain or maintain organisational legitimacy according to Lindblom?

Correct Answer
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A key underlying assumption of Institutional Theory is that people are:

Correct Answer
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Exam 5: Theories in Accounting

Stakeholder theory:

Correct AnswerverifiedShow Answer

Which of the following theories have been used to explain voluntary disclosure in the annual report?

Correct AnswerverifiedD

According to institutional theory which of the following statements is NOT true about corporate social and environmental disclosure:

Correct AnswerverifiedShow Answer

Accounting theory helps us understand accounting better as:

Correct AnswerverifiedShow Answer

Agency theory would hold that managers on compensation contracts which have bonuses tied to a current measure of performance would prefer to:

Correct AnswerverifiedShow Answer

Key problems for owner-manager agency relationships are:

Correct AnswerverifiedShow Answer

According to stakeholder theory accounting information:

Correct AnswerverifiedD

A normative theory:

Correct AnswerverifiedShow Answer

Which of the following is NOT considered a stakeholder according to the managerial branch of stakeholder theory?

Correct AnswerverifiedShow Answer

Agency theory concentrates on:

Correct AnswerverifiedShow Answer

Legitimacy theory argues that disclosure practice.

Correct AnswerverifiedShow Answer

The central proposition of contingency theory is:

Correct AnswerverifiedShow Answer

A positive theory:

Correct AnswerverifiedShow Answer

Contingency theory proposes that:

Correct AnswerverifiedShow Answer

Theories in accounting can help us to understand the decisions of:

Correct AnswerverifiedD

Which of the following is NOT one of the four ways an organisation can obtain or maintain organisational legitimacy according to Lindblom?

Correct AnswerverifiedShow Answer

A key underlying assumption of Institutional Theory is that people are:

Correct AnswerverifiedShow Answer

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D

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D

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D

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