Global Accounting And Control A Managerial Emphasis 1st Edition Sidney J. Gray, Stephen B. Salter, Lee H. Radebaugh - Solutions

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How do these reports differ in terms of format? You may wish to use Table 7.2 as a template. Table 7.2 Microsoft Corporation Consolidated Statement of Earnings Year Ended June 30, 1999 Australian GAAP Canadian GAAP U.K. French GAAP GAAP Net income-after tax foreign GAAP $10,658 $10,794 $10,529
What are the main differences in the accounting measurement policies used?
To what extent are information disclosures by MNEs in directors’ annual reports, as opposed to the financial statements, likely to be useful to financial analysts and investors?
What are the likely costs and benefits to MNEs of making additional voluntary information disclosure?
In which countries are stock exchange disclosure regulations most stringent? Least stringent? What are the reasons for this?
What is the likely effect of international stock exchange listing status on the voluntary disclosures of MNEs? :
Discuss the kinds of information you would expect to see in the corporate review, the operations review, and the financial review sections of an MNE’s directors’ report.
Discuss the relevance to financial analysts and investors of additional disclosures by MNEs with regard to corporate strategy and related issues.
To what extent are additional disclosures about human resources likely to be significant to financial analysts and investors?
What is meant by a value-added statement? To what extent is it likely to provide information over and above that already available in the income statement?
Why is information relevant to future prospects likely to be of interest to financial analysts and investors? What are the constraints on MNEs providing such voluntary disclosures in practice?
Discuss the usefulness of the SEC requirement in the United States to provide a management discussion and analysis of the financial statements.
Compare and contrast the U.S. and IASC approaches to segmental disclosure.
Is the standard of segmental reporting likely to improve following the recent changes to IAS 14?
To what extent and for what reasons do you think disclosure levels in stock markets around the world are likely to change during the next ten years? In the context of increasing competition for finance in international capital markets, what types of information should MNEs consider disclosing more
What is your view of the major deficiencies/weaknesses in disclosure by MNEs today? In answering this, make clear your objectives and provide arguments to support your claims.
When it comes to translating the financial statements of entities in highly inflationary countries, which of the following approaches makes more sense and why?a. Remeasure using the temporal method, even though the functional currency is the local currency for operating purposes.b. Restate for
Why do currency differences affect foreign exchange reporting?
Why do German and French approaches to reporting foreign exchange gains and losses differ from those in the United Kingdom?
What difference has the introduction of a comprehensive income statement made to U.S. accounting for foreign exchange?
Choose a country and prepare a report on its foreign exchange risk. How do you think accountants should deal with this?
Why do you think it has been so difficult for accounting regulators to deal with accounting for foreign exchange over the last twenty-five years?
On April 1, a U.S. manufacturer enters into a commitment to sell equipment to a British importer with the sale denominated in pounds sterling £500,000. The goods are to be delivered the same day and paid for on June 1.a. Assuming that no forward contract is entered into, what would be the journal
On April 1, a British manufacturer enters into a commitment to sell equipment to a Us) importer for £100,000. The goods are to be delivered on April 1 and paid for on June 30.a. Assuming that no forward contract is entered into, what would be the journal entries for the U.S. importer on April 1,
On April 1, a U.S. manufacturer sells equipment to a British importer. The sale is denominated in pounds sterling £250,000.a. Assuming that no forward contract is entered into, what would be the journal entries for the U.S. exporter on April 1, April 30, May 31, and June 30?b. Assuming that a
If the sale were denominated in U.S. dollars at the April 1 exchange rate, what would be the journal entries for parts (a) and (b) of Exercise 3 in pounds sterling for the British importer?
In this chapter, we discussed the personal qualifications, educational requirements, and experience requirements of different countries. Develop a matrix that includes countries down one side and the three dimensions just described across the top so you can compare and contrast the different
The U.S. system leans toward a heavy education requirement mixed with practice, and the British system leans more toward a heavy experience requirement bordering on apprenticeship. Which system is more effective and why? Which system would you recommend for a country like Mozambique?
If you were a certified accountant in your home country and wanted to practice as an auditor in another country, you would most likely not be allowed to practice. Why do these barriers to entry exist? What strategies could you pursue to service your clients in markets where you are not allowed to
What is the purpose of the Eighth Directive of the European Union? What do you think some of these challenges hindering its total implementation might be?
Why are the audits of most of the largest global companies done by the Big Five auditing firms?
In 1989, Price Waterhouse considered merging with Arthur Andersen, but the merger fell apart. What are some of the reasons why those two firms might have considered merging in the first place? What are some of the possible reasons why they didn’t go through with their merger plans? What might be
What are some different ways auditing firms can service their global clients? What are the strengths and weaknesses of each approach?
What are some of the challenges global auditing firms face in trying to service their clients?
The IFAC is attempting to harmonize auditing standards and practices. What do you think are some of the barriers to this harmonization? What are the benefits of their work being successful?
You have the opportunity to work on an internship in a foreign country for an audit firm with an office in that country. What would be the pros and cons of such an experience, and what would you do to prepare for that experience?
It was mentioned in the chapter that KPMG has reorganized itself around five national industry-focused teams that consist of assurance, tax, and consulting professionals concentrating on each industry. Why do you think KPMG moved to this type of organizational structure rather than remain organized
What does a global public accounting firm need to do to prepare its professionals to be competitive in a global environment?
A company has subsidiaries in host countries A and B. Country A has a statutory corporate tax rate of 30 percent, whereas country B’s is 40 percent. What are some specific reasons that country B’s effective tax rate might actually be more favorable to the firm?
Assume that a U. S. company wishing to shelter its foreign source income from U. S. taxes uses the Netherlands Antilles. Using a review of the literature outside the text, answer the following questions:a. Why is the Netherlands Antilles such a good tax haven country?b. What problems does the
How does the existence of classic and integrated corporate tax systems affect the financing decisions of multinational corporations?
Why and how do tax authorities get involved in the transfer pricing situation?
According to the survey mentioned in this chapter, what are the most important factors companies consider in establishing transfer prices? What might cause this survey to provide less-than-accurate reasons for actual practices?
Assume a VAT situation where the tax rate is 15 percent, with export sales exempt. The manufacturer does not purchase inputs on which VAT has been paid, and its net selling price to the wholesaler before VAT is £250. The wholesaler adds value of £300, and the retailer adds value of £500 to the
ABC company has income from the following countries:ABC’s subsidiary in Z declares a 40 percent dividend; Z’s withholding tax on dividends is 5 percent. Both the branch and the distribution facility, which is wholly owned, retain all earnings. The distribution earnings are considered to be
Puerto International has a branch in Mexico that manufactures a garage door alarm for people with mountain bike racks that fit on the top of their cars. The subsidiary earned 800,000 dollars in 2000 before tax, with Mexican corporate tax rates at 40 percent. Taxes were paid evenly throughout the
In 2000, San Fernando drilling shipped 300 diamond drill bits to its subsidiary in Ecuador. The drill bits were shipped at San Fernando’s cost of $1,000,000 each to avoid Ecuador’s duty of 20 percent. In 2000, Ecuador’s income tax on foreign subsidiaries was 35 percent and the U. S. corporate
As a U. S. congressman from South Carolina you are considering proposing a bill to eliminate a state income tax of 7 percent and a sales tax of 5 percent and replace it with a value-added tax of 10 percent. Discuss the pros and cons of such an action. You should note a typical South Carolina family
Why has there been increasing recognition of the significance of international accounting diversity?
To what extent and in what ways are capital market participants, notably investors and corporations, affected by international accounting diversity?
Discuss the nature of Nobes’s hierarchical classification scheme. What are the critical factors involved? How easy is it to fit countries into the categories suggested?
Critically evaluate the results of the empirical tests of Nobes’s proposed classification scheme.
Discuss the nature and relevance of culture to financial reporting classifications, making special reference to the “financial reporting values” identified by Gray. By what process is culture likely to impact on financial reporting systems?
Critically evaluate Gray’s proposed classification of culture areas according to the authority and enforcement aspects of financial reporting systems. How does your own country fit in with this classification scheme?
What are the major differences in measurement principles between the Anglo-Saxon, Nordic, Germanic, Latin, and Asian countries?
What is meant by the “index of conservatism”? How is it calculated in principle? How can it be used to assess the impact of specific accounting principles? i
Of the countries named below, which is the most likely to have deferred taxation in the balance sheet?:a. USAb. Francec. Austriad. Germany
Which of the following factors is most likely to cause the differences that separate Mexican accounting from the more traditional European systems?a. Tax ratesb. Education levelc. Languaged. Inflation
Depreciation in Germany, like most German accounting practices, is based on:a. The Plan Comptableb. The Autobahnc. The rules laid out in the tax coded. GAAP as commonly agreed by accountantse. None of the above
What are the prospects for global harmonization using international accounting standards?
What are some of the major reasons why a business or accounting student should be interested in international business?
What are the major reasons why companies become involved in international business?
What are some of the different ways in which a firm can get involved in international business?
Why are Japanese companies among the largest in the world?
What are some of the environmental constraints a company must consider as it develops its global strategy?
What are firm-specific advantages, and how do they influence a company’s global strategy?
Why have strategic alliances and joint ventures become a popular way of growing internationally?
What is it that differentiates MNEs from domestic corporations and gives rise to differences in accountability?
Discuss the importance of access to international securities markets to the development of multinationals.
How important is an appreciation of cultural differences in doing business internationally?
Prepare a list of multinational firms that operate in your city. A good guide might be a firm that recruits on campus. Try to find their Web sites on the Internet and list where they have manufacturing facilities around the globe.
Visit a local supermarket and make a list of ten products manufactured outside your country.
Visit a Web site for currencies and make a list of currencies and rates of exchange with your own home currency.
Plan a study term abroad. What would you want to learn and why? How would this change if you were a business?
Extract the annual report of a Fortune Global 500 company from a country different from your home country; use the site www.glgc.com/g600.html, or http://www.pathfinder.com/fortune/global500/index.html. How different is the format of the annual report compared with that of a major company from your
Explain the difference between spot and forward exchange rates.
Find a currency of your choice. How has its value changed against the U.S. dollar over the last ninety days? What about since January 3, 1975?
What kinds of foreign exchange risk would a U.S. company face that is exporting goods to Mexico? What kinds of things would you monitor to determine what will happen to the value of the Mexican peso?
You have just been asked to conduct an executive program for the international controller’s office of a company from your home country that is becoming increasingly involved in exports to countries in Europe, Asia, and Latin America. Because the company has only recently begun to expand abroad,
The Barings desk on the trading floor is abandoned. The computer screens are dead. The little Union Jack that was sitting on one of the terminals a few days ago has mysteriously vanished. This little island of silence amid the hordes of roaring, gesticulating traders is a melancholy symbol of how
The implication from the discussion in this chapter is that as a company becomes more global, it concentrates more on the informal and subtle mechanisms for controlling global operations than it does the structural and formal mechanisms. Why is this so? Do you think structural and formal mechanisms
What impact does the organizational structure of a firm have on the control system?
Look at the annual report of an MNE. As you read about the product lines and geographical operations, what kind of organizational structure would you guess the company has?
What challenges would your chosen MNE face in designing an effective management control system?
Why is the accounting function of a firm likely to be centralized? What aspects of the accounting function should be centralized?
What role does MIS play? Do they have a chief information officer? Do they have a Web site? How in-depth do you consider it to be? You may wish to compare it with other sites.
What are some of the major ways that information technology is helping MNEs overcome the problems of time and space?
What is electronic data interchange, and what is its contribution to the control system in an MNE?
Why is it so difficult for MNEs to transfer data from one country to another?
United Airlines entered into a strategic alliance with Thai Airways to develop and market airline services. Would you characterize this strategic alliance as a global innovator, an integrated player, a local innovator, or an implementer from the standpoint of United? What is your logic for your
Hoechst is a German chemical company operating in different product lines and different geographic areas. Its major business areas are chemicals (23% of sales), fibers (15%), polymers (17%), health (24%), engineering and technology (15%), and agriculture (6%). Across these product lines, Hoechst
Discuss some of the major dimensions of the international business environment that make it difficult to establish a strategic control system.
Based on some of the studies of performance evaluation, what are the most widely used techniques? What are some of the strengths and weaknesses of these techniques?
Which of the methods for setting the budget and monitoring performance as discussed by Lessard and Lorange eliminate the impact of foreign exchange variances? Which of those approaches would you prefer to use and why?
What are some of the national similarities and differences in performance evaluation techniques?
What are SBUs beginning to use as major indicators of performance in the global setting, and why are they being used?
What is EVA, and how can it be used in a global context?
Identify several aspects of the international environment and the global strategy of the MNE that influence the budgeting process.
MultiCorp is a French-based company with operations in the United Kingdom. In determining the budget for 2001, MultiCorp looks at its historical performance in the United Kingdom and notes that for March 2000, its operations were as follows:In trying to establish the budget in British pounds for

Global Accounting And Control A Managerial Emphasis 1st Edition Sidney J. Gray, Stephen B. Salter, Lee H. Radebaugh - Solutions

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