When the FASB Considers the Effects of an Accounting Standard

question 26

Multiple Choice

When the FASB considers the effects of an accounting standard:

• A) The only costs it considers are auditing costs.
• B) It considers benefits primarily in terms of the information needs of the stock market.
• C) It is not concerned with producer costs.
• D) It is primarily concerned with the effects of the standard on small or nonpublicly listed firms.

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Definitions:

Cognitive Biases

Systematic patterns of deviation from norm or rationality in judgment, causing illogical conclusions or decision making.

Heuristics

Simple, efficient rules or methods used to form judgments and make decisions, based on limited and often personal data, rather than exhaustive analysis.

Deliberative Processes

A method of collective decision-making in which participants engage in careful discussion and consideration of issues, options, and their implications before reaching a decision.