Which Of The Following Is Not An Argument Supporting Unregulated Markets?
Chapter 4
The Economics of Financial
Reporting Regulation
TRUE/FALSE
1. Financial reporting for publicly-listed companies in the United States was first regulated in the 1950s. ANS: F
2. Congress empowered the Securities and Exchange Commission to regulate financial reporting in the 1930s ANS: T
3. The SEC has allowed accounting policy-making power to remain in the private sector. ANS: T
4. Arguments supporting unregulated markets are largely inductive in nature. ANS: F
5. All of the arguments supporting the case for unregulated markets relate to the incentives for a firm to report information about itself to owners and to the capital market in general. ANS: …show more content…
The present financial disclosure system imposes costs on users rather than the companies themselves. ANS: F
32. In setting policy, due process, means that a regulatory agency seeks to involve all affected parties in its deliberations. ANS: T
MULTIPLE CHOICE
1. Which of the following is not an argument supporting unregulated markets? a. Agency theory b. Private contracting opportunities c. Signalling theory d. Social goals XXXXX
2. Which of the following concepts provides a framework for analyzing financial reporting incentives between managers and owner? a. Signalling theory b. Agency theory XXXXX c. Information symmetry d. Private contracting
3. Which of the following concepts explains why firms have an incentive to report voluntarily to the market even if there were no mandatory reporting requirements. a. Signalling theory XXXXX b. Life-cycle theory c. Information overload d. Capture theory
4. Which of the following concept holds that anyone who genuinely desires information about a firm is able to obtain it? a. Signalling theory b. Agency theory c. Information symmetry d. Private contracting
The Economics of Financial
Reporting Regulation
TRUE/FALSE
1. Financial reporting for publicly-listed companies in the United States was first regulated in the 1950s. ANS: F
2. Congress empowered the Securities and Exchange Commission to regulate financial reporting in the 1930s ANS: T
3. The SEC has allowed accounting policy-making power to remain in the private sector. ANS: T
4. Arguments supporting unregulated markets are largely inductive in nature. ANS: F
5. All of the arguments supporting the case for unregulated markets relate to the incentives for a firm to report information about itself to owners and to the capital market in general. ANS: …show more content…
The present financial disclosure system imposes costs on users rather than the companies themselves. ANS: F
32. In setting policy, due process, means that a regulatory agency seeks to involve all affected parties in its deliberations. ANS: T
MULTIPLE CHOICE
1. Which of the following is not an argument supporting unregulated markets? a. Agency theory b. Private contracting opportunities c. Signalling theory d. Social goals XXXXX
2. Which of the following concepts provides a framework for analyzing financial reporting incentives between managers and owner? a. Signalling theory b. Agency theory XXXXX c. Information symmetry d. Private contracting
3. Which of the following concepts explains why firms have an incentive to report voluntarily to the market even if there were no mandatory reporting requirements. a. Signalling theory XXXXX b. Life-cycle theory c. Information overload d. Capture theory
4. Which of the following concept holds that anyone who genuinely desires information about a firm is able to obtain it? a. Signalling theory b. Agency theory c. Information symmetry d. Private contracting