MODULE 1

Quick Check

Question 1

Which three of the following are traditionally recognised as being attributes of a profession?

Athe service ideal

Bextensive preparatory education

Csubstantial financial remuneration

Dapplication of professional judgment

Question 2

Which one of the following is a likely implication for the accounting profession following the collapse of large companies such as Enron, HIH Insurance and Lehman Brothers?

A.an increase in the profession's autonomy

B.increased regulation and greater scrutiny by the regulators

C.a tendency for the community to have more faith in the accounting profession

D.a further reduction in the number of large accounting firms resulting from a merger process

Question 3

Which three of the following statements correctly describes a profession?

AProfessions exist mainly to serve society.

BProfessions are strictly regulated by external bodies.

CProfessions have a substantial degree of independence and autonomy.

DProfessions are given permission to provide services to the public through some regulatoryprocess.

Question 4

Which three of the following features are included in the concept of 'service ideal'?

Athe efficient and effective use of society's resources

Bthe provision of accounting-related services as cheaply as possible

Cthe pursuit of excellence in accounting practice by the individual professional accountant

Dthe responsibility to behave in a manner that maintains the good reputation of the profession

Question 5

Which one of the following best describes professional judgment?

Athe acquisition of knowledge through a formal educational process

Bthe ability to diagnose and solve complex, unstructured 'values-based' problems

Cpractical experience that ensures the accounting role can be completed in a professionalmanner

Dproblem-solving and the ability to apply the right technical solution despite pressure orsocialideals

Question 6

The corporate collapses of the early 2000s and those that occurred during the Global Financial Crisis had some important common themes that we must understand if, as professionals, we are to assist in preventing their recurrence.

Which three of the following were common themes of the corporate collapses?

AThey were the result of directors abusing their trust.

BThe collapses were not associated with incentive payments and greed.

CThey had a negative impact on the credibility of the accounting profession.

DThey demonstrated a willingness of corporations to engage in risks that were not fullyunderstood.

Short questions

1. What is 'enlightened self-interest'? Explain.

1. What is 'de-professionalisation' of accounting? Explain.

1. What is 'creative accounting'? Explain.