21. Which of the following statements about stakeholders is true?
A. Stakeholders are individuals that have an interest in an entity.
B. All stakeholders have the same perspective on an entity.
C. Stakeholders normally have unrestricted access to an entity's records.
D. Every entity has the same stakeholders.
22. Who is responsible for deciding what, how and when information is presented in the financial statements?
A. Stakeholders
B. Accountants
C. Management
D. Government
23. Which of the following statements about preparers is true?
A. Preparers are neutral providers of accounting information.
B. Preparers may not be the people who physically prepare the financial statements.
C. Preparers have the same perspective as stakeholders.
D. Preparers decide what information is going to be presented in the financial statements, but not when it is presented.
24. Sandy's Sandwiches is a small business owned and operated by Sandy Southerly that is not publicly traded and has never borrowed any money. Which of the following would be a constraint in the preparation of its financial statements?
A. Canada Business Corporations Act
B. CICA
C. IFRS
D. The Income Tax Act
25. Why are there different acceptable ways to account for similar transactions?
A. To allow flexibility to deal with different economic circumstances.
B. To allow managers to enhance their bonuses.
C. To confuse the stakeholders.
D. Because the rule makers cannot agree on one best method.
26. Who are the people who examine an entity's financial information on behalf of external stakeholders?
A. Accountants
B. Internal auditors
C. External auditors
D. Preparers
27. Which of the following is an important feature of external auditors?
A. They are independent of the entity.
B. They have previous experience managing the entity.
C. They have an ownership interest in the entity.
D. They provide many other services to the entity while engaged as auditors.
28. External auditors are hired by which one of the following groups?
A. Management
B. Internal auditors
C. Shareholders
D. Tax authorities
29. Because managers can exercise professional judgment when preparing the financial statements for their company, the stakeholder should:
A. read the report of the external auditor.
B. place complete confidence in the financial data.
C. understand that management can be motivated to act in its own self-interests.
D. place no confidence in the financial data.
30. In a public corporation, which of the following stakeholders would be the most interested in the financial statements of the entity?
A. Shareholders
B. Managers
C. Employees
D. Auditors