ca_exm_at1_2009-06

Ca_exm_at1_2009-06 - CGA-CANADA ACCOUNTING THEORY CONTEMPORARY ISSUES[AT1 EXAMINATION June 2009 Time 3 Hours Marks Note All references to the

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
EAT1J09 ©CGA-Canada, 2009 Page 1 of 6 CGA-CANADA ACCOUNTING THEORY & CONTEMPORARY ISSUES [AT1] EXAMINATION June 2009 Marks Time: 3 Hours Note: All references to the Handbook refer to the CICA Handbook . 30 Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Note: 2 marks each a. A securities market is semi-strong form efficient under which of the following conditions? 1) When no information about the security is reflected in the price of the security 2) When all private information about the security is reflected in the price of the security 3) When all information about the security is reflected in the price of the security 4) When all public information about the security is reflected in the price of the security b. Which of the following statements most correctly reflects the concept of moral hazard? 1) Moral hazard reflects the fact that the owner of a firm and its manager possess different information about the cash flow potential of the firm. 2) Moral hazard reflects the assumption that managers have an inherent tendency to shirk their duties. 3) Moral hazard reflects the fact that the owner of the firm cannot observe, without a cost, the effort applied by the manager. 4) Moral hazard can be eliminated if the manager’s compensation is based on the firm’s net income. c. Which of the following statements correctly reflects the definition of noise traders? 1) Noise traders are traders who use their voices to bid for shares in a stock exchange. 2) Noise traders do not make buy and sell decisions based on information about the future cash flow potential of the firm. 3) Noise traders are those traders who buy and sell the largest number of shares in a day in a stock market. 4) Noise traders trade on their own behalf rather than on behalf of any large brokerage houses. d. Which of the following statements describes the term “information perspective on decision usefulness”? 1) Provision of fair value information of assets and liabilities in financial statements 2) Provision of useful information to help assist investors assess future firm performance 3) Provision of information to help assist owners of firms assess the effort applied by the firm managers 4) Provision of proprietary information in financial statements Continued. ..
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
EAT1J09 ©CGA-Canada, 2009 Page 2 of 6 e. Which of the following statements reflects what is meant by proprietary information? 1)
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/10/2011 for the course ACCT 1204 taught by Professor Chang during the Spring '11 term at Nanjing University.

Page1 / 18

Ca_exm_at1_2009-06 - CGA-CANADA ACCOUNTING THEORY CONTEMPORARY ISSUES[AT1 EXAMINATION June 2009 Time 3 Hours Marks Note All references to the

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online