国际会计第七版英文版课后答案

1、Chapter 8Global Accounting and Auditing StandardsDiscussion Questions1. Argument for measurement: ?Discrepancies in internationalmeasurementproduce accounting amounts that (even where financial transactions identical), leading to incorrect doesn ' t matter what ismay are vastly different and pos

2、ition are comparisons.disclosed;noHere it reliablecomparisons are possible anyway.Arguments for disclosure: ? If companies do not disclosethey can hide losses or future problems from financial statement users. For example, losses can be hidden by offsetting problems simply by incomplete,them against

3、 related to lossnotdisclosing even thecompleteinformation,measurement comparisons.principlesgains. contingencies them. Thus,application willExpected future can be hiddenleadifdisclosureofis similartoincorrectClearly, international accounting that both measurement andconvergencedisclosurerequires be

4、madecomparable.502. The term convergence is associatedwith theInternationalAccounting Standards Board. Before theIASB, harmonization was the commonly used term. Harmonization means that standards are compatible; they do not contain conflicts. Harmonization was generally taken to mean the elimination

5、 of differences inexisting accounting standards, in other words, finding a commongroundConvergence differencesinmeansnationalamong the andstandards. convergence are closely aligned. might also involve coming treatment not in any current standards.Thus,theexistinggradual elimination of international

6、accounting terms harmonization and However, convergence up with a new accountingstandards.3. a. Reciprocity, or mutual recognition, exists when regulators outside of the home country accept a foreign firm ' s financial sta tements based on the home country ' s principles, or perhaps IFRS. Fo

7、r example, the London Stock Exchange accepts U.S. GAAP-based financial statements in filings made by non-U.K. foreign companies. Reciprocity does not increase cross-country comparability of financial statements, and it can createan unlevel playing field in that foreign companies may be allowed to ap

8、ply standards that are less rigorous than those used by domestic companies.b. With reconciliation, foreign firms can prepare financial statements using the accounting standards of their home country or IFRS, but also must provide a reconciliation between accounting measures (such as net income and s

9、hareholders' equity) of the homecountry and the country where the financial statements are being filed. Reconciliations are less costly than preparing a full set of financial statements under a different set of accounting principles, but provide only a summary, not the full picture of the enterp

10、rise.c. International standardsare aresultof eitherinternationalor political agreement,or voluntary (orprofessionallyencouraged)compliance.Whenaccountingstandards areappliedthroughpolitical,legal, or regulatory procedures, statutory rules typically govern the process. All other international standar

11、ds efforts in accounting are voluntary in nature.4. Key rationales supporting the development and widespread application of IFRS include:a. A growing body of evidence indicates that the goal of international convergence of accounting, disclosure and auditing has been widely accepted.b. All dimension

12、s of accounting are becoming converged worldwide.c. Increasing numbers of highly credible organizations strongly support the goals of the IASB.d. National differences in the underlying factors that leadto variation in accounting, disclosure, and auditing practices are narrowing as capital and produc

13、t markets become more international.e. International standards will improve the comparability of international financial information.f. Time and money will be saved on international consolidations, the components of which now are subject to different national laws and practices.g. There may be a ten

14、dency for accounting standards throughout the world to be raised to the highest possible level.h. Widespread application of IFRS might also result in:? Improved managerial decision making within multinational enterprises.? Improved allocations of corporate investment moneyworldwide.Better internatio

15、nalunderstandabilityof financialstatements.Cost reductions in accounting processing and financial disclosure multinational rmation costs forpublishedGreater international credibility for financial statements.5. Key rationales against the development and widespread application of IFRS

16、 include:a. Accounting has built-in flexibility. Its ability to adapt to widely different situations is one of its most important features. Critics doubt that international standards can be flexible enough to handle differences in national backgrounds, traditions, and economic environments, and may

17、be a politically unacceptable challenge to sovereignty.a tactic ofthe large internationalb. It is claimed that international accounting standard setting isaccounting share.service firmsto expand their marketc. Internationalstandardsoverloadfor companiesmay create thatstandardsdobusinessinternational

18、ly.d. National political concernsaccounting influencesstandards.frequentlyInternationalintrude onpoliticalwouldcompromiseinternationalaccounting standards.are not suitable for smalle. International standardsand medium-sized companies, particularly unlisted ones with no public accountability.f. Risks

19、 of misinformation uniform standards may give the appearance of similarities when in fact countries and companies may be highly dissimilar.g. Political costs of the necessary international treaties on financial accounting and reporting which would have to be negotiated to enforce the use of IFRS.6.

20、Evidence indicating wide acceptance of IFRS around the world:a. Growing numbers of companies are adopting IFRS voluntarily and refer to their use of IFRS in their annual reports.b. Dozens of countries base their national accounting standards on IFRS.c. Some 7,000 EU listed companies now use IFRS in

21、their consolidated financial statements.d. Many international organizations, such as IOSCO, endorse the use of IFRS.e. IFRS are used as an international benchmark in many major industrialized countries.f. IFRS are accepted by many stock exchanges and securities regulators.g. IFRS are recognized by t

22、he European Commission (EC) and other supranational bodies.h. Norwalk Agreement committed FASB and IASB to convergence.7. The International Accounting Standards Board is overseen by the International Accounting Standards Committee, consisting of 22 trustees: six from NorthAmerica, six from Europe, s

23、ix from the Asia-Pacific region, and four from any area. The trustees appoint the members of the IASB. The IASB receives advice from the StandardsAdvisory Council on its agenda and priorities. The SAC consists of around 30 members appointed by the IASC trustees and they represent a diversity of geog

24、raphic andprofessional backgrounds.The IASB consists of 14 members,12 full-timeand twopart-time.It follows a due process in settingaccountingstandards.For each standard,the board normallypublishesa discussionpaper thatsets out the variouspossible requirements for the standard and the argumentsfor an

25、d against each one.Later, the board publishesanexposuredraft for public comment,and it then examinesthe argumentsfinal standardput forward in the comment process.is issued when nine of the 14 board members have voted in its favor.8. Accounting harmonization in the EU is just one element of the overa

26、ll project of harmonizing the legal and economic systems of the member states, and is part of the process of harmonizing company law.The Fourth Directive illustrates the concept of harmonization, and specifies accounting measurement (valuation) and disclosure requirements. It provides formatrules fo

27、r the balance sheet and the profit and loss account.The true and fair view is the overriding requirement and holds for footnote disclosures as well as the financial statements. The Fourth Directive also sets out the requirements for financial statement audits.The Seventh Directive addresses consolid

28、ated financial statements. It requires consolidations for groups of companies above a certain size, specifies disclosures and notes, and requires a directors 'report.When it wasissued in 1983, consolidated financial statements were the exception rather than the rule in Europe.The Eighth Directiv

29、e addressed various aspects of the qualifications of professionals authorized to carry out legally required (statutory) audits. Now referred to as the Statutory Audit Directive, it was substantially amended in 2006. The new directive tightens oversight of the audit profession and has standards for,

30、among other points, auditor appointment and rotation, and continuing professional education.The EU abandoned its approach to harmonization to one favoring the IASB for practical and political reasons. The Fourth and Seventh Directives were incompleteandessentially remained as they were issued. Impro

31、vements to them proved difficult to achieve and the directives did not achieve the comparability expected. Some saw a set of Europe-wide standards as an unnecessary redundancy given the emergence of comprehensive IFRS. Others saw U.S. GAAP as a rival to IFRS. The EU cannot influence U.S.GAAP, but ca

32、n influence IFRS. By putting its weight behind the IASB, the EU could serve as a counterweight to U.S. GAAP.9.International accounting harmonization/convergence should address many, if not most, investor concerns about cross-national differences in accounting practices. The keyissue here is comparab

33、ility - investors want to make “ apples to apples ” comparisons of financial statements of companies from countries around the world. However, converged standards are only the beginning. Standards must also be comparably applied and they must be rigorously enforced. The financial statements must als

34、o be similarly audited to ensure comparable reliability.10.Convergence of auditing standards will help ensure that audit quality will reach acceptable levels worldwide. Auditing convergence maybe less difficult to achieve thanaccounting convergence because auditing is more technically oriented and t

35、here is wider agreement as to what constitutes best practices in auditing than there is for accounting principles.IFAC is a worldwide organizationof over 160 memberorganizations in 120 countries.Its mission includesestablishing and promoting adherence to high-quality auditing and other professional

36、standards, and furthering the international convergence of such standards. Its work is done through standard setting boards and standing committees. Among its standard setting boards are:?International Accounting Education Standards Board ?International Auditing and Assurance StandardsBoard?Internat

37、ional Ethics Standards Board for AccountantsIts work spans the entire array of professional responsibilities of auditors and includes standards covering professional education, the conduct of the audit, and professional ethics.11.IOSCO consists of securities regulators from more than100 countries. T

38、ogether, IOSCO members are responsible for regulating more than 90 percent of global securities markets. Oneof IOSCO ' s objectives is promoting “ highstandards of regulation in order to maintain just, efficient, and sound markets. ” IOSCO has worked extensively on international disclosure and a

39、ccountingstandardstofacilitate the ability of companies to raise capital efficiently in global securities markets. It has a technical committee whose sole focus is multinational disclosure and accounting. Model disclosure standards were published in 1998 and 2002.IOSCO' s disclosure harmonizatio

40、n work is important because it has established a set of high quality disclosure standards, globally recognized, that serves as a model for nations around the world as they develop national requirements for cross-border offerings and initial listings.12.The UN and OECD now play supporting roles in ha

41、rmonizing accounting and auditing standards. The IASB and IFAC are now the clear leaders in this endeavor, but in the 1970s and 1980s, both the UN and OECD were potential rivals. Most of the effort of the UN and OECD is directed toward providing technical accounting assistance to developing countrie

42、s. For example, the UN has focused much attention on Russia and countries of the former Soviet bloc, and on African countries.Exercises1.One of the main problems with mutual recognition (or reciprocity) is that it actually may make financial statements within the home market noncomparable. If many d

43、ifferent accounting standards are acceptable, then companies domiciled in countries with rigorous standards (such as the United States) would be at a disadvantage to companies whose home country standards are not as stringent, but still would be acceptable. Investors also would face the difficult ta

44、sk of having to master many sets of accounting principles inorder to be able to understandthe associated financial statements.The U.S. SEC considers reconciliation to be a cost-effective means to allow foreign firms to list on a domestic exchange. With reconciliation, differences between accounting

45、standards are identified and quantified without the need to prepare a second set of financial statements. However, significant differences between domestic and foreign accounting principles can increase the burdens associated with reconciliation, and reconciliations do not provide a full picture of

46、the enterprise as would result from a second set of financial statements.The use of International Financial Reporting Standards would provide many benefits for cross-border listings.Companies would have to provide only one set of financial statements for all nondomesticcapital markets, andinvestors

47、would have to be familiar with only one set of accounting principles to properly understand and interpret nondomestic financial statements. However, as with reconciliation, domestic companies required to comply with domestic standards still would compete for capital with nondomestic companies that w

48、ould be required to comply with a different (and possibly less stringent) standard.Preferred approaches from perspectives of different groups:a. Investors might prefer international standards, as they would increase the ease in understanding information from nondomestic companies. Knowledge of only

49、one set of standards would be required to understand all nondomestic statements.However, there is also acase for reconciliation,which presents in aneconomical manner the significant differences between nondomestic and domestic financial statements anddoes not require investors tobe familiar with any

50、 setof accounting standards other than the home country.b. Company management might prefer mutual recognition, as it does not require a company to prepare any additional information and requires no additional expense or time commitments. However, companies in some countries might adopt IFRS voluntar

51、ily to increase their credibility with investors and increase the overall quality of their financial reporting.c. Regulatory authorities might prefer reconciliation as it places the burden on companies yet provides adequate disclosure and investor protection.d. Stock exchanges might prefer convergen

52、ce as it is the only method that provides truly complete and identical information disclosure from companies outside the home market.e. Professional associations will take positions according to their constituents associations of stockbrokers might prefer convergence to the extent that it would make

53、 company information easier to understand, whereas associations of company executives might prefer reciprocity.2.The following discussions are based on the respective organizations ' Web sites at the time of writing.International Federation of Accountants (IFAC)IFAC, an organization of national

54、professional accountancy organizations, plays a critical role in the convergence of auditing standards and other international auditing initiatives.The organization has over 160 memberorganizations in 120 countries, representing more than 2.5 million accountants. Organized in 1977, IFAC' s goal

55、is todevelop the accountancy profession and converge its professional standards worldwide to enable accountants to provide services of consistently high quality in the public interest.To achieve its objective, IFAC develops and promotes technical,professionaland ethical standards foraccountants, pro

56、vides leadership on emerging issues, and serves as a voice for the world ' s accountants on issues of public and professional concern. IFAC fosters the advancement of strong national professional accountancy organizations, and works closely with regional accountancy organizations and outside age

57、ncies to accomplish this.The IFAC Council, comprised of one representative from each member body, provides overall leadership of IFAC. The council elects the IFAC Board, and is responsible setting policy and overseeing IFAC operations, the implementation of programs, and the work of IFAC ' s sta

58、ndard setting groups and committees. The Public Interest Oversight Board (PIOB), an independent board, provides additional oversight. Day-to-day administration is provided by the IFAC chief executive located in New York, which is staffed by accounting professionals from around the world.IFAC ' s professional work is done through its standa