mie Keller was pleased with his new Job position as director of international consolidation for Gamma Enterpeises. Gamman Enterprises was a consolidation of high ch gaming companles, with subsidiaries of Alpha, Beta. Gamma, Della, and Epsilon. This past year Gamma had compleied a tax imversion with Epsion, which is eadquartered in Ireland, becoming the parent company. Gamma was the oldest company of the group and the only subsidiary with maderial inventory. amie was preparing for a meeting with Jason Day, the CFO of the group, as well as the senior manager on the audit of Gamma. The discussion was plaaning for the lear-end and issues with the lax inversion and consolidation with Epsilon as the parent company, Jamie and Jason were in the conference room when Thomas Stein, the senior auditor, arrived. Jamie was surprised as Thomas wats an accounting classmate from sia University. Thomas. What a eurpise! I did not know that we would be working together on the arinual financlat atatements. Lorig bime, no see, Jamie said. Yes, irs good to see you, We did many a team project together in school. Cengratulations on your new position. Jasion fold me what a great iob you ware doing" Jason cleared his twroat and said, 5 see we all know each other. Let's get started as I think there are a lot of year-end issues with this tax miverion. ruat, the -Under IFRS most asbets wil be revalued to tair market values. That will increase the valuei an the batanoe sheet. The bigoest dianbach wil the the baie Thamas whaf de you think? "Hold on, a minute," Jason jumped in. "This tax inversion is to be a tax savings or tax-neutral situation, particularly this year when the stockholders are expecting profts. The U.S, government has allowed LIFO inventory for tax and financlal reporting purposes so that is what Gamma is going to do.- Jamie asked, "Are you suggesting that Gamma continue using U.S. GAAP while the other subsidiaries change to the IFRS basis? If I remember correctiy from school, a company must pick one financial reporting format and follow the principles in those standards. Besides, LIFO is not acceptable under IFRS:- T don't see why it is a big deal to use IFRS for all but Gamma's inventory, Jason said. Thomas, what do you think? "'m sure something can be worked out," Thomas replied. The discussion changed to other issues. Afer the meeting, Jamie and Thomas went to lunch to catch up on old times. Al tunch. Jamie commented, 'Thomas, do you really mean to let Jason and Garmma Enterprises pick and choose which accounting standards to follow, using a mixed- bag approach?" "No, you were right, Jamie. However, I could see that the issue was upsetting Jason. It may take time to convince him". "I was just surprised that you seemed open to it at all. Aren't the auditors suppose to be the watchdogs of business? "Jamie, 1 am up for partner this next year. I need to keep Gammo as a happy client. The pressure fo keep revenues coming into the accounting limm is a big weight on my shoulders:" Well, just don't forget your values." Assume you are in Thomas's position and know that you have to let Jason know the correct way to convert to if R is accounting. What will be the objections or pushback from Jason? theif interests in addressing the following quections What is at stake sar the key partiot, inclusing mose who dagagee with you? What levers can you ube to infwence thoee wha disggee with you
