Mitra Corporation is headquartered in the United States and is owned entirely by U.S. investors. However, a large portion of Mitra's manufacturing operations are located in India.

"Since all of our shares are owned entirely by U.S. investors, in addition to our corporate office being here in the States, the company's functional currency for financial reporting purposes should be the U.S. dollar," proclaims Timothy Walker, the company's CEO, to the CFO, John Hara.

"But Timothy, our Indian subsidiary's primary operating environment is India since we source our raw materials there, set out prices based on market conditions in India, and finance the operations from loans in Indian rupees obtained from local banks. That is why we must use the Indian rupee as our functional currency."

1. Given the facts of this case, as the auditor, would you agree with Mr. Walker or Mr. Hara?