Self – Test Questions

1. Discuss accounting as the language of business and the role of accounting

information in making economic decisions

2. Discuss the significance of accounting systems in generating reliable accounting

information

3. Explain the importance of financial accounting information for external parties—

primarily investors and creditors—in terms of the objectives and the
characteristics of that information

4. Explain the importance of accounting information for internal parties—primarily

management—in terms of the objectives and the characteristics of that
information

5. Discuss elements of the system of external and internal financial reporting that
create integrity in the reported information

6. Identify and discuss several professional organizations that play important roles
in preparing and communicating accounting information.

7. Discuss the importance of personal competence, professional judgment, and

ethical behavior on the part of accounting professionals

8. In order to achieve the objectives of the accountancy profession, professional

accountants have to observe five main prerequisites or fundamental principles as
per IFAC Code of Ethics. What are those five?

9. What are the core values of the Office of Federal Auditor General?

10. A member of the Ethiopian Professional Association of Accountants and Auditors

has to maintain 7 points of Code of Ethics. What are those Seven?

11. What are the Six Pillars of Character?

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 12. What are the seven main differences between Financial Accounting and
Management Accounting?

13. What are the Applicable Financial Reporting Standards in Ethiopia as per
Financial Reporting Proclamation 847/2014 - Art 5?

14. Differentiate between the “Public interest entity” as per Art 2 (17) and the “Small
or medium enterprise” as per Art 2 (20) of the Financial Reporting Proclamation
847/2014.

15. What are the financial statements to be prepared as per Art 2 (8) of the Financial
Reporting Proclamation 847/2014 ?

16. What are the main benefits of IFRS?

17. What are the main Characteristics of Externally Reported Information?

18. What are the three main Types of Accounting Information? Explain each.

19. What is accounting?

20. Describe the various types of individuals who use accounting information and
how they use that information to make important decisions.

21. What does the going concern assumption mean for a business?

22. Which concept states that accounting information should be complete, neutral,
and free from material error?

23. Financial statements in Ethiopia are reported in Ethiopian Birr. What assumption
supports this statement?

24. Explain the role of the International Accounting Standards Board (IASB) in
relation to International Financial Reporting Standards (IFRS).

25. What is the accounting equation? Briefly explain each of the three parts.

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