Economic Consequences of Accounting Standard-Setting Means

question 15

Multiple Choice

Economic consequences of accounting standard-setting means:

• A) Standard-setters must give first priority to ensuring that companies do not suffer any adverse effect as a result of a new standard.
• B) Standard-setters must ensure that no new costs are incurred when a new standard is issued.
• C) The objective of financial reporting should be politically motivated to ensure acceptance by the general public.
• D) Accounting standards can have detrimental impacts on the wealth levels of the providers of financial information.

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Definitions:

Competition

A situation in which individuals or entities strive against each other to achieve a goal that cannot be shared.

Cooperative Reactions

Actions undertaken by individuals or groups that are designed to work together in a mutually beneficial manner.

Ingroup-Outgroup Bias

The tendency to favor members of one's own group (ingroup) over those from different groups (outgroup).

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often accompanied by prejudice towards other groups.