SUSTAINABILITY MIDTERM EXAM
QUESTIONS WITH CORRECT ANSWERS
When deciding whether information is material both quantitative and qualitative factors
should be considered - Answer- true
The Management's Discussion & Analysis (MD&A) portion of an annual Form 10-K
requires, among other things, disclosure of currently known trends, and uncertainties
that are reasonably expected to have material effects. - Answer- true
The SEC does require that the MD&A include non-financial performance indicators that
are used by management - Answer- true
Reasons the AICPA gives for accountants being in an excellent position to help
organizations link sustainability activities to strategies include their skills in all of the
following - Answer- a) Measurement
b) Assurance
c) Control
Reasons the AICPA gives for accountants being in an excellent position to help
organizations link sustainability activities to strategies include their skills in all of the
following except - Answer- compilations
When you see the abbreviation CSR reports in the context of sustainability these initials
stand for what three words? - Answer- Corporate social responsibility
Materiality is defined differently by the U.S. Supreme Court and other proprietary
definitions. Use of the word "material" in different reports based on these different
definitions could expose corporations to legal risks - Answer- true
Concerns with the current state of sustainability reporting include - Answer- I - The
quality of the information
II - The standardization of the information
III - The comparability of the information
The Institute of Management Accountants (IMA) describes "the relationship between
sustainability and accounting as identifying "where connections can be made between
non-financial reporting, financial value, and the ____________ of the entity." - Answer-
Sustainable worth
Which of the following countries was the first to adopt a mandatory Sustainability
Reporting Law in 1997? - Answer- Finland
, Relevance - Answer- The ability of information to make a difference in a decision,
including its timeliness, predictive value, and feedback value.
What are the five dimensions of sustainability performance? - Answer- Economic,
governance, social, ethical, and environmental issues
sustainability - Answer- Development that meets the needs of the present without
compromising the ability of future generations to meet their own needs
The concept of business sustainability has become an overriding factor in successful
___________________ for many organizations worldwide. - Answer- strategic planning
Transparent disclosure - Answer- The philosophical underpinning of the federal
securities law regime
Regulation S-K reporting requirements for Form 10-K - Answer- a. Legal Proceedings
b. Risk Factors
c. Description of Business
The 1989 Interpretative Release explains the important distinction between required
disclosure and voluntary forward-looking information to be included in the
MD&A.Therefore, the issuer has a duty to disclose the ______ trends and
_____________that are reasonably likely to have a material effect on results of
operations and financial condition - Answer- known; uncertainties
Internal control reporting became mandatory with the passage of the ___________. -
Answer- Sarbanes-Oxley Act of 2002
The Commission's 2003 interpretive release reminds issuers of three main goals of
MD&A disclosure, which of the following is one of the main goals - Answer- A. To
provide a narrative explanation of a company's financial statements
B. To enhance the overall financial disclosure and provide the context within which
financial information should be analyzed
C. To provide information about the quality of, and potential variability of, a company's
earnings and cash flow
In order to group industries based on their sustainability impacts, SASB developed
_______. - Answer- SICS™
Criteria required in order for an enterprise to be considered sustainable - Answer- a)
Socially justified
b) Environmentally sound
c) Increases public wealth with proper mechanisms for its distribution
d) Ethically conducted
QUESTIONS WITH CORRECT ANSWERS
When deciding whether information is material both quantitative and qualitative factors
should be considered - Answer- true
The Management's Discussion & Analysis (MD&A) portion of an annual Form 10-K
requires, among other things, disclosure of currently known trends, and uncertainties
that are reasonably expected to have material effects. - Answer- true
The SEC does require that the MD&A include non-financial performance indicators that
are used by management - Answer- true
Reasons the AICPA gives for accountants being in an excellent position to help
organizations link sustainability activities to strategies include their skills in all of the
following - Answer- a) Measurement
b) Assurance
c) Control
Reasons the AICPA gives for accountants being in an excellent position to help
organizations link sustainability activities to strategies include their skills in all of the
following except - Answer- compilations
When you see the abbreviation CSR reports in the context of sustainability these initials
stand for what three words? - Answer- Corporate social responsibility
Materiality is defined differently by the U.S. Supreme Court and other proprietary
definitions. Use of the word "material" in different reports based on these different
definitions could expose corporations to legal risks - Answer- true
Concerns with the current state of sustainability reporting include - Answer- I - The
quality of the information
II - The standardization of the information
III - The comparability of the information
The Institute of Management Accountants (IMA) describes "the relationship between
sustainability and accounting as identifying "where connections can be made between
non-financial reporting, financial value, and the ____________ of the entity." - Answer-
Sustainable worth
Which of the following countries was the first to adopt a mandatory Sustainability
Reporting Law in 1997? - Answer- Finland
, Relevance - Answer- The ability of information to make a difference in a decision,
including its timeliness, predictive value, and feedback value.
What are the five dimensions of sustainability performance? - Answer- Economic,
governance, social, ethical, and environmental issues
sustainability - Answer- Development that meets the needs of the present without
compromising the ability of future generations to meet their own needs
The concept of business sustainability has become an overriding factor in successful
___________________ for many organizations worldwide. - Answer- strategic planning
Transparent disclosure - Answer- The philosophical underpinning of the federal
securities law regime
Regulation S-K reporting requirements for Form 10-K - Answer- a. Legal Proceedings
b. Risk Factors
c. Description of Business
The 1989 Interpretative Release explains the important distinction between required
disclosure and voluntary forward-looking information to be included in the
MD&A.Therefore, the issuer has a duty to disclose the ______ trends and
_____________that are reasonably likely to have a material effect on results of
operations and financial condition - Answer- known; uncertainties
Internal control reporting became mandatory with the passage of the ___________. -
Answer- Sarbanes-Oxley Act of 2002
The Commission's 2003 interpretive release reminds issuers of three main goals of
MD&A disclosure, which of the following is one of the main goals - Answer- A. To
provide a narrative explanation of a company's financial statements
B. To enhance the overall financial disclosure and provide the context within which
financial information should be analyzed
C. To provide information about the quality of, and potential variability of, a company's
earnings and cash flow
In order to group industries based on their sustainability impacts, SASB developed
_______. - Answer- SICS™
Criteria required in order for an enterprise to be considered sustainable - Answer- a)
Socially justified
b) Environmentally sound
c) Increases public wealth with proper mechanisms for its distribution
d) Ethically conducted
