Scenario Background: John, a seasoned accountant, has been working for a medium-sized manufacturing company called XYZ Widgets Inc. for the past five years. The company produces high-quality widgets, which are in high demand in the market. However, in recent months, XYZ Widgets Inc. has been facing significant accounting challenges, raising concerns about the financial health and future sustainability of the company. Three major issues have come to light:

Inventory Valuation Problems: XYZ Widgets Inc. maintains a large inventory of raw materials, work-in-progress, and finished goods in its warehouses. The company uses the traditional cost accounting method, which has led to discrepancies in inventory valuation. The manufacturing process involves various stages and multiple products, making it difficult to allocate costs accurately. This has caused significant fluctuations in the cost of goods sold, impacting the company's reported profitability. The finance team is struggling to determine the best inventory valuation method to reflect the true economic value of the inventory accurately.

Revenue Recognition Issues: The company has recently introduced a new product line, "SmartWidgets," which has gained popularity quickly. The sales team has been offering various discounts and incentives to customers, leading to complex sales agreements. There is a concern that revenue recognition may not align with the actual delivery of goods and services. This poses a risk of overstating revenue in the financial statements and misrepresenting the company's financial performance to stakeholders. John is unsure about the appropriate revenue recognition criteria to apply to these complex sales contracts and is concerned about the consequences of misreporting revenue.

Tax Compliance Challenges: XYZ Widgets Inc. operates in several countries, each with its own unique tax regulations and requirements. The company has been expanding its international presence, but the tax department is struggling to stay updated with the ever-changing tax laws. As a result, there are concerns about potential tax compliance issues and the associated financial and reputational risks. John is tasked with ensuring that the company complies with tax laws across multiple jurisdictions while optimizing its tax liabilities. However, he is finding it increasingly difficult to navigate the complex and evolving landscape of international taxation.

Given these significant accounting challenges, the CFO and the board of directors are relying on John to provide expert guidance and find solutions to address these issues effectively. The outcome of John's decisions and recommendations will have far-reaching consequences for the financial stability and success of XYZ Widgets Inc. and its stakeholders. In light of these challenges, how should John approach these issues and what steps should he take to ensure accurate financial reporting, revenue recognition, and international tax compliance for XYZ Widgets Inc.?