SUSTAINABILITY ACCOUNTING EXAM 1
QUESTIONS AND ANSWERS
Which Supreme Court Justice spoke early in the past century about the benefits of
disclosure as, "Publicity is justly commended as a remedy for social and industrial
diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient
policeman."
a) Justice Oliver Wendell Holmes
b) Justice Thurgood Marshall
c) Justice Louis Brandeis
d) Justice Earl Warren - Answer- c) Justice Louis Brandeis
The history of the Securities Act demonstrates that it was intended to
a) Protect investors
b) Influence corporate behavior
c) A & B
d) None of the above - Answer- a)Protect investors
Of the EGSEE sustainability dimensions discussed which two does our text consider the
reporting on to be more standardized, currently, than the others?
a) Governance & Social
b) Governance & Environmental
c) Economic & Governance
d) Environmental & Economic
e) Environmental & Ethical - Answer- c) Economic & Governance
"Connected reporting" as introduced by the Prince of Wales's Accounting for
Sustainability initiative emphasizes organizations reporting on their various performance
dimensions as they are linked to their:
a) Long-term risks
b) Their value-chain
c) Strategic objectives
d) Financial Statements - Answer- c) Strategic objectives
What trend appears to have increased investor interest in nonfinancial information?
a) Increases computer processing abilities
b) Greater interconnectedness of the global supply chains
c) Decreased relevance of financial statements to market capitalization
d) Public protests against polluters - Answer- c) Decreased relevance of financial
statements to market capitalization
True or false? The fiduciary's duty of loyalty calls for impartial treatment of different
types of beneficiaries, including different generations. - Answer- True
, Securities on the NYSE lost what percent of their value between September 1929 and
June 1932?
a) 60%
b) 75%
c) 80%
d) 85% - Answer- c- 80%
The Public Company Accounting Oversight Board (PCAOB) was created in reaction to
the
a) The convergence efforts between FASB and the IASB
b) The scandals at Enron and WorldCom
c) The collapse of Bear Stearns and Lehman Brothers
d) The bursting of the "dot.com" bubble - Answer- b) The scandals at Enron and
WorldCom
True or false? The Supreme Court has provided the following standard of materiality:
"There must be a substantial likelihood that the disclosure of the omitted fact would
have been viewed by the reasonable investor as having significantly altered the "total
mix" of information made available" and "It does require proof of a substantial likelihood
that disclosure of the omitted fact would have caused the reasonable investor to change
his vote." - Answer- False- it does not require proof
True or false? When deciding whether information is material both quantitative and
qualitative factors should be considered. - Answer- True
True or false? 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
True or false? The SEC does not require that the MD&A include non-financial
performance indicators that are used by management. - Answer- FALSE
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:
a) Measurement
b) Assurance
c) Compilations
d) Control - Answer- c- complications
When you see the abbreviation CSR reports in the context of sustainability these initials
stand for what three words? - Answer- corporate social responsibility
Which of these criteria is not required in order for an enterprise to be considered
sustainable?
a) Socially justified
QUESTIONS AND ANSWERS
Which Supreme Court Justice spoke early in the past century about the benefits of
disclosure as, "Publicity is justly commended as a remedy for social and industrial
diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient
policeman."
a) Justice Oliver Wendell Holmes
b) Justice Thurgood Marshall
c) Justice Louis Brandeis
d) Justice Earl Warren - Answer- c) Justice Louis Brandeis
The history of the Securities Act demonstrates that it was intended to
a) Protect investors
b) Influence corporate behavior
c) A & B
d) None of the above - Answer- a)Protect investors
Of the EGSEE sustainability dimensions discussed which two does our text consider the
reporting on to be more standardized, currently, than the others?
a) Governance & Social
b) Governance & Environmental
c) Economic & Governance
d) Environmental & Economic
e) Environmental & Ethical - Answer- c) Economic & Governance
"Connected reporting" as introduced by the Prince of Wales's Accounting for
Sustainability initiative emphasizes organizations reporting on their various performance
dimensions as they are linked to their:
a) Long-term risks
b) Their value-chain
c) Strategic objectives
d) Financial Statements - Answer- c) Strategic objectives
What trend appears to have increased investor interest in nonfinancial information?
a) Increases computer processing abilities
b) Greater interconnectedness of the global supply chains
c) Decreased relevance of financial statements to market capitalization
d) Public protests against polluters - Answer- c) Decreased relevance of financial
statements to market capitalization
True or false? The fiduciary's duty of loyalty calls for impartial treatment of different
types of beneficiaries, including different generations. - Answer- True
, Securities on the NYSE lost what percent of their value between September 1929 and
June 1932?
a) 60%
b) 75%
c) 80%
d) 85% - Answer- c- 80%
The Public Company Accounting Oversight Board (PCAOB) was created in reaction to
the
a) The convergence efforts between FASB and the IASB
b) The scandals at Enron and WorldCom
c) The collapse of Bear Stearns and Lehman Brothers
d) The bursting of the "dot.com" bubble - Answer- b) The scandals at Enron and
WorldCom
True or false? The Supreme Court has provided the following standard of materiality:
"There must be a substantial likelihood that the disclosure of the omitted fact would
have been viewed by the reasonable investor as having significantly altered the "total
mix" of information made available" and "It does require proof of a substantial likelihood
that disclosure of the omitted fact would have caused the reasonable investor to change
his vote." - Answer- False- it does not require proof
True or false? When deciding whether information is material both quantitative and
qualitative factors should be considered. - Answer- True
True or false? 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
True or false? The SEC does not require that the MD&A include non-financial
performance indicators that are used by management. - Answer- FALSE
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:
a) Measurement
b) Assurance
c) Compilations
d) Control - Answer- c- complications
When you see the abbreviation CSR reports in the context of sustainability these initials
stand for what three words? - Answer- corporate social responsibility
Which of these criteria is not required in order for an enterprise to be considered
sustainable?
a) Socially justified
