Your cousin, an engineering major, has inherited some money and wants to invest in an auto company.

She has never taken an accounting course and has asked you to help her compare a U.S. automaker's financial statements to those of a German automaker. Your cousin has given you the income statement, asset section of the balance sheet, and audit opinion for Volkswagen for a recent year.

Required:
Review the excerpts of Volkswagen's Financial statements. Write a letter to your cousin explaining the similarities and the dissimilarities you would expect to Find if you compared Volkswagen's statements to those of a company in the United States. Offer your opinion on whether you would expect the underlying accounting principles of the two countries to be similar or dissimilar. On what are you basing your opinion?

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AUDIT CERTIFICATE The consolidated financial statements, which we have audited in accordance with professional standards, comply with the German legal provisions. With due regard to the generally accepted accounting principles, the consolidated financial statements give a true and fair view of the Group's assets, liabilities, financial position and profit or loss. The Group management report is consistent with the consolidated financial statements. Hanover, February 24, 2002 C&L TREUARBEIT DEUTSCHE REVISION Aktiengesellschaft