12. In countries such as the U.S. there is great demand for public disclosure of accounting information. What is the reason for this? A. Corporate management isn’t trustworthy. B. Businesses rely heavily on financing through issuance of stock to the public. C. The American populace is better able to read financial statements than people in other countries. D. U.S. government officials are generally members of corporate boards of directors and can get all the information they require. 13. Historical cost is the primary basis for asset valuation under U.S. GAAP. Why is historical cost NOT as important in the accounting systems of Latin America as in the U.S.? A. Historical costs are too difficult to calculate in the currencies used in Central and South America. B. The countries of Latin America have experienced very high rates of inflation which would make historical costs meaningless to readers of financial statements. C. There is very little foreign direct investment in the countries of Latin America so few assets need to be accounted for. D. In Latin America asset prices are very stable making historical costs equal to replacement costs so it doesn’t matter which valuation basis is used. 14. In the United States conformity between presentation of the financial statements and the tax statements is required only for: A. goodwill. B. depreciation. C. gains or losses on securities. D. the use of the LIFO inventory cost flow assumption. 15. In some countries financial accounting and tax accounting are so closely related that there is very little need to account for deferred income taxes. Which of the following countries has a financial accounting system that is most different from its tax laws? A. United States of America B. Japan C. Germany D. France 16. In the Nobes classification of accounting systems micro-based accounting systems are oriented toward: A. government economics. B. business practices. C. tax laws. D. code law. 17. According to the research of Christopher Nobes the most relevant factor in determining the purpose of financial reporting is: A. the financing system of the country. B. religious differences across countries. C. the population of the country. D. the strength of the country’s accounting profession. 18. According to the research of Christopher Nobes what is the primary determinant of the accounting systems in developing countries? A. The nature of their financing system B. The accounting system of countries that dominate their culture C. The size of their capital market D. The strength of their tax code 19. The “Fair Presentation/Full Disclosure Model” is a classification scheme used by: A. Germany. B. Japan. C. the United States and the United Kingdom. D. Brazil. 20. The extent to which hierarchy and unequal authority distribution in institutions and organizations are accepted within a culture is referred to as: A. uncertainty avoidance. B. masculinity. C. individualism. D. power distance. 21. A cultural preference for a loosely knit social fabric rather than a tightly knit social fabric is referred to as: A. uncertainty avoidance. B. masculinity. C. individualism. D. power distance. 22. A cultural emphasis on values of performance and achievement rather than values of relationships caring and nurturing is referred to as: A. uncertainty avoidance. B. masculinity. C. individualism. D. power distance.
