Adm4342 Mid-Term

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ADM 4342M
Accounting Theory
Mid-Term Exam
February 4, 2009

Instructor: B. La Rochelle, Ph.D., C.A.
Duration: 2 hours
Value: 25% of your final grade

Note to students: This is a closed-book exam, containing 3 questions, worth 30 marks in total. Apart from sundry writing materials (pens, pencils and the like), no examination aids are permitted

NAME: __________________________________________

STUDENT #: ________________________

Statement of Academic Integrity

The School of Management does not condone academic fraud, an act by a student that may result in a false academic evaluation of that student or of another student. Without limiting the generality of this definition, academic fraud occurs when a student
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Since the civil and criminal courts do not hold the profession responsible for its construction of bad rules, there is a disconnect. The profession has a penchant for creating accounting and auditing rules, but these rules in fact reduce professional judgment.
Collectivization of judgment by the firm is quite a different matter to Miller. Because the firm suffers when the individual is hauled before civil or criminal court, the firm has incentives to develop judgment in its personnel. In addition senior partners can develop the professional judgment of junior partners by having the junior partners observe the problem-solving abilities of senior partners in real and specific instances. Likewise, junior partners can train managers and so on. The result is a firm that has a high quality of professional judgment…
Required (15 marks):
With reference to the course material to date, discuss the foregoing sentiments.
Question 2
The following is an article published in www.thedeal.com

FASB to Congress: Don 't politicize accounting rules
Published October 2, 2008 at 4:34 PM

The Financial Accounting Foundation, the independent private sector organization responsible for overseeing the Financial Accounting Standards Board, wants Congress to stay out of making accounting rules through the political process.
"We believe that once Congress starts setting accounting standards through its political process, the integrity

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