国际会计第七版英文版课后答案第一章.docx

国际会计第七版英文版课后答案第一章.docx

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国际会计第七版英文版课后答案第一章

Chapter1

Introduction

DiscussionQuestions

1.Inthedomesticcase,accountingisaninformationservicethatprovidesfinancialinformationaboutadomesticentitytodomesticusersofthatinformation.Internationalaccountingisdistinctiveinthattheentitybeingreportedoniseitheramultinationalcompanywithoperationsandtransactionsthattranscendnationalboundariesorinvolvesanentiiywithreportingobligationstoreaderswhoarelocatedoutsidethereportingentity’scountryofdomicile.

2.

3.Advantage:

Somemightarguethatmeasurement,disclosure,andexternalauditingarethreedistinct（althoughrelated）processes,involvingdifferentmembersofthecompany.Forexample,corporateattorneysoftenareinvolvedindisclosureissues,butseldominterveneinmeasurementissues.TheBoardofDirectorsworkswiththeexternalauditorsbutnotnecessarilywiththecomptrollersoffice.Thus,discussionofaccountingrequirementsandvoluntaryaccountingchoicesindifferentjurisdictionsissimplifiedbyfocusingonthethreecomponentsofaccounting.Disadvantage:

measurement,disclosureandauditingareinterdependent,andshouldnotbeviewedinisolationofoneanother.Acompanychoosingtodiscloseaslittleaspossible,forexample,mayuseaccountingmeasurementapproachesthatreducetheinformationcontentoffinancialstatements,andselectanexternalauditorwhowillberelativelylenientinenforcingaccountingrequirements.Onealternativeclassificationmightincludeaccounting（measurementanddisclosure）,andauditing.Asecondclassificationmightincludefinancialreporting（annualandinterimreporting,regulatoryfilings）andadhocdisclosure（pressreleases,analystmeetings,etc）.Anyclassificationisarbitrary,andpotentiallyusefuldependingonitspurpose.

4.

5.Factorscontributingtotheinternationalizationofthesubjectofaccountinginclude:

thegrowthandspreadofmultinationaloperationsaroundtheworld,thephenomenonofglobalcompetition,theincreasingnumberofcross-bordermergersandacquisitionsthatoccuralmostdaily,continuedadvancesininformationtechnology,andtheinternationalizationoftheworld’scapitalmarkets.

6.

7.Internationaltradeinvolvesimportingandexportingactivities.Themajoraccountingissueassociatedwithforeigntradeinvolvesaccountingforforeigncurrencytransactions.Foreigndirectinvestment,ontheotherhand,involvesconductingoperationsabroad.Thisactivityexposesaccountantstoanewsetofissuesthatrunthegamutfromhavingtoconsolidateforeigncurrencyaccountsbasedondiversemeasurementrulestoissuesofevaluatingtheperformanceofforeignsubsidiarymanagers.

8.

9.Studentswilloverwhelminglyargueinfavorofharmonization.Thisisprobablyagoodstartingpointforthecourse.AftertheyareintroducedtothechaptersleadinguptoChapter8,somemaynolongerfeelthatharmonizationisnecessarilytheanswertoalloftheirinternationalaccountingproblems.

10.

11.Recentdevelopmentssuchasthegrowthandspreadofmultinationaloperations,Internationalizationoftheworld’scapitalmarkets,increasedcrossbordermergersandacquisitions,thephenomenonofglobalcompetitionandfinancialinnovationhaveincreasedreaderdependenceonforeignfinancialstatements.Anunderstandingofaccountingdifferencesandtheireffectonreportedmeasuresofprofitability,efficiency,solvencyandliquidityarecriticalifproperdecisionsaretobemade.Internationalaccountingissueshavebecomemorecomplexinrecentyearsforseveralreasons.Financialtransactionsarebecomingmorecomplex,affectingbothnationalandinternationalaccounting.Forexample,theuseofcomplexfinancialinstrumentsanddevelopingaccountingstandardsfortheseexoticinstrumentshasbeenproblematic.Globalfinancialmarketsalsoarebecomingmorevolatile,leadingtolargechangesinassetandbalancesheetamounts（suchasrelatedtoinvestments）andmajorsourcesofincomeandexpense.Therelatedaccountingissuesaredifficult.Thegrowinginternationalizationofbusinessalsopromotescomplexity.Foreigncurrencytransactionsandtranslationhavebeentroublesomeaccountingissuesforyears,andarebecomingmoreimportantascross-borderbusinessandfinanceincrease.Also,differencesinnationalaccountingprinciplespotentiallyaremoretroublesomeasbusinessbecomesmoreinternational.However,asconvergenceeffortsworldwideaccelerate,andmoreandmorecompaniesandcountriesadoptInternationalFinancialReportingStandards（IFRS）,complexityarisingfromdifferencesinnationalaccountingprincipleswilldecrease.

12.

13.Examplesofexternalreportingissuesinclude:

14.

a.Doestranslationfromonesetofmeasurementrulestoanotherchangetheinformationcontentoftheoriginalmessage?

b.Shouldaccountsofforeignoperationsbetranslatedtoparentcurrencywhenconsolidatedstatementsareprepared?

c.Whichexchangeratesshouldbeemployedwhentranslatingfromonecurrencytoanother?

Examplesofinternalreportingissuesinclude:

a.Whichexchangeratesshouldbeusedforbudgetingpurposes?

b.Shouldforeignmanagersbeevaluatedintermsofparentcurrencyorthelocalcurrencyofthecountryinwhichthemanageroperates?

c.Whichpricesshouldoneusewhentransferringgoodsorservicesbetweenmembersofthemultinationalenterprise-cost,market,cost-plusorsomeothermetric?

15.Globalcapitalmarketactivitiesandtransactionsreachbeyondsinglepoliticalorlegaljurisdictions.Forexample,globalcapitalmarkettransactionsincludethefollowing:

（1）anAmericantouristbuyingAustraliandollarsfortravelpurposesintheSouthPacific;

（2）aJapaneseinsurancecompanybuyingGermangovernmentbondsasaninvestment;and（3）aNigerianagriculturaldevelopmentprojectreceivingcashsubsidiesfromtheEuropeanUnion（EU）.

16.

Theinternationalequitiesmarketisoneglobalcapitalmarket.Asecondsuchmarketcoversforeignexchangetransactions,thatis,whenonenationalcurrencyisexchangedinto,tradedforward,hedged,s,orotherwiseconvertedtoanothernationalcurrency.ThismarketisestimatedathundredsofbillionsofU.S.dollarsperday.Thetotalworldforeignexchangemarketisthelargestmarketonearth.Theinternationalbondmarketisstillanotherglobalcapitalmarket.Thebondsconstitutingthismarketareunderwrittenbyinternationalsyndicatesofbanksandaremarketedandtradedallovertheworld.Globalcapitalmarketsareavitalpartoftheworldeconomy.

17.Englishshouldbedesignatedastheformalinternationalaccountinglanguage.Technicalaccountingterms（termsofart）donottravelwellinternationally.Sincetechnicalaccountingtermsoftenhaveattributedmeanings（forexample,generallyacceptedaccountingprinciplesareneithergenerallyacceptednorprinciples）,itisdifficultorimpossibletotranslatethesetermsintootherlanguagesandretaintheiroriginalmeanings.Inotherdisciplines,suchconsiderationshavecausedtheestablishmentofLatinastheuniversallanguageforbotanicalclassifications,Italianasthelanguageforspecifyingthetempo（andothermattersofinterpretation）ofmusicalcompositions,andEnglishasthelanguageofelectroniccomputing.Sinceaccountingisusedworldwide,asingleworldwidelanguageforaccountingmakessense.

18.

WhyshouldEnglishbetheworldwidelanguageforaccounting?

Englishalreadyhasbecomethelanguageofworldcommerceandmultinationalbusiness.Thus,theuniversaluseofEnglishinaccountingwouldparallelawell-establishedbusinesspractice.Also,theaccountingdisciplinewasinmanyrespectsdevelopedasanoffshootofAnglo-Americaneconomics,whichmeansthatthelanguagerootsofmanyaccountingtermsandconceptsareEnglish.Amongnon-Englishspeakingpeople,Englishisthemostcommonsecondlanguage.Thevastmajorityoftheworld’saccountingliteratureiswritteninEnglish,andnearlyallinternationalaccountingconventionsandconferencesuseEnglishastheofficiallanguage.MultinationalcorporationsgenerallyuseEnglishintheiraccountingandfinancialoperatingmanuals,aswellasforcorporatecommunications,withoutregardtonationaldomiciles.Therefore,theworldwidebenefitsofadoptingEnglishastheuniversallanguageofaccountingarelikelytobegreaterthanforanyotherlanguage,andtheworldwidecostsarelikelytobeless.

19.Emergingmarketsarethosewhosefinancialsystemsareemergingfromstatedominationthroughaprocessofliberalization.Developedcountriesarethosewithliberalizedfinancialsystems.Manypeoplebelievethatliberalizationishighlybeneficialtosustainedeconomicgrowth.Manydifferentclassificationsofdevelopedversusemergingmarketcountriesareused,andoftenthetermsarenotdefined,althoughnoonecorrectsetofdefinitionsfordevelopedandemergingmarketsexists.

20.

Studentsshouldbeencouragedtosuggesttheirowncriteriaastowhatconstitutesadevelopedasopposedtoanemergingmarket.Theemergingmarketcountriesareingeographicregionsthataregenerallynothighlyindustrialized.Butonecannotgeneralizehereasextensiveeconomicliberalizationistakingplaceinthesecountries（insomemorethaninothers）.Forexample,entrybarrierstoforeignbusinesses,governmentregulationofbankingoperations,andcreditcontrolshavebeeneasedinmanyofthecountriesonceclassifiedas“emerging.”

21.Privatizationsofstate-ownedcorporationshavehaddramaticeffectsonglobalcapitalmarkets.Often,theprivatizedentitiesarelarge,well-knowncompaniesinwhichthenationalgovernmentretainsalargeownershipinterest,andretail