国际会计复习资料 2

Chapter 1:What is International Accounting?Domestic accounting: an information specialty providing information about a firm to users of that information as a basis for economic decisions.International accounting (defined): same as above except that the firm being reported on is a multinational company with operations and transactions that cross national boundaries or an entity with reporting obligations to non-domestic readers.What Does International Accounting Diversity Entail? Measurement principlesFinancial disclosure (corporate transparency)Auditing practicesContributing Factors●Accounting’s international heritageDouble-entry originates in the Italian city states. Bookkeeping spreads to Germany and assists the spread of capitalism.Dutch enhance income measurement.French use accounting for governmental planning and control.Double entry assists the British in managing and controlling commercial interests in the colonies.Accounting plays a major role in the U.S. industrial revolution.●Paradox of international accountingIn many countries, accounting remains a nationalistic affair. Accounting serves people and institutions whose decisions are international in scope.Accounting diversity creates a demand for harmonization.●Growth and spread of multinational operations●Reporting issues when business transcends nationalboundariesConsolidation of foreign accountsAccounting for foreign currency fluctuationsAccounting for changing pricesInternational planning and controlPerformance evaluation of foreign operationsFinancial risk managementInternational taxation and transfer pricing●Financial innovationIdentifying potential market risksQuantifying trade-offs associated with alternative risk reduction strategiesMeasuring risk exposuresAccounting for specific hedge products Evaluating the effectiveness of hedging programs●Global competitionCompetitive benchmarking necessitates international comparisons.●Cross-border mergers and acquisitionsCorporate valuation is a function of accounting measurements that vary from country to country.●Internationalization of capital marketsRaising external finance abroad means that financial reports must increasingly travel internationally.●Reporting issues associated with internationalizationof capital marketsHow to analyze and interpret foreign accounts?How to report to foreign readers?How to harmonize reporting standards internationally?Some questions in chapter 1:1.explain how international accounting differs from purely domestic accounting.In the domestic case, accounting is an information service that provides financial information about a domestic entity to domestic users of that information. International accounting is distinctive in that the entity being reported on is either a multinational company with operations and transactions that transcend national boundaries or involves an entiiy with reporting obligations to readers who are located outside the reporting entity’s country of domicile.2.what contemporary factors are contributing to the internationalization of the subject of accounting.Factors contributing to the internationalization of the subject of accounting include: the growth and spread of multinational operations around the world, the phenomenon of global competition, the increasing number of cross-border mergers and acquisitions that occur almost daily, continued advances in information technology, and the internationalization of the world’s capital markets.3.describe how foreign direct-investment activities differ from international trade and the implications of this difference for accounting.International trade involves importing and exporting activities.The major accounting issue associated with foreign trade involves accounting for foreign currency transactions. Foreign direct investment, on the other hand, involves conducting operations abroad. This activity exposes accountants to a new set of issues that run the gamut from having to consolidate foreign currency accounts based on diverse measurement rules to issues ofevaluating the performance of foreign subsidiary managers.Chapter 2:Why Study Development and Classification?●DevelopmentHelps understand a nation’s accounting.Explains the differences and similarities in accounting around the world.●ClassificationHelps understand why and how national accounting systems differ.Helps analyze whether these systems are converging or diverging.Are a way of viewing the world.--Reveals what group members have in common, and what distinguishes groups from each other.Development●Sources of finance----Equity marketsProfits measure how well managers have run the company. Accounting is used to assess cash flows, risks, and to value the firm.Extensive disclosures.-----BanksConservative earnings for creditor protection.Less extensive disclosures.●Legal system---Code lawLaws are all-embracing.Accounting tends to be prescriptive and procedural. Accounting focuses on legal form.Accounting standards and procedures are incorporated into national laws.---Common lawLaws develop on a case-by-case basis.Accounting develops from experience and judgment. Accounting tends to be flexible, adaptive, and innovative. Accounting focuses on economic substance.Accounting rules are established by private sector professional organizations.●TaxationMust companies record revenues and expenses in their accounts to claim them for tax purposes?Are financial accounting and taxation the same?Or are they different?●Political and economic tiesAccounting ideas and technologies are transferred through conquest, commerce, and other forces.●InflationInflation distorts historical cost measurements.Countries with high inflation often require that companies incorporate price changes into the accounts.●Level of economic developmentAffects the types of transactions and which ones are most prevalent in the economy which, in turn,Affects the accounting issues that are faced.●Educational levelAffects the capability for professional accounting training. Where education levels are low, countries import accounting training or send citizens elsewhere to get it. SUMMARYSeveral variables are closely associated.---Common law legal system, strong equity markets, and separation of financial and tax accounting.---Code law legal system, credit-based financing, and accounting rules that conform to tax law.Result is two basic orientations of accounting.--Fair presentation--Legal compliance●CultureCulture (Hofstede)Individualism vs. collectivismPower distance – high vs. lowUncertainty avoidance – high vs. lowMasculinity vs. femininityAccounting values (Gray)Professionalism vs. statutory controlUniformity vs. flexibilityConservatism vs. optimismSecrecy vs. transparencyClassification●Four approaches to accounting development (Mueller1967)---Macroeconomic approachAccounting derived from and designed to enhance national macroeconomic goals.Example: Sweden---Microeconomic approachAccounting derived from microeconomics.Maintaining physical capitalSeparation of capital and incomeReplacement costsExample: the Netherlands---Independent discipline approachAccounting derived from business practices, judgment, and trial-and-error.Examples: U.K. and U.S.---Uniform approachAccounting is standardized by central government and used as a tool for administrative control.Example: France●Legal systems: common law vs. code law accounting ---Common law accountingOriented toward fair presentation, transparency, and full disclosureSeparation between tax and financial accounting Accounting standard setting in private sectorParallels stockholder model of corporate governance---Code law accountingLegalistic orientation, opaque with low disclosure Alignment between tax and financial accounting Accounting standard setting in public sectorParallels stakeholder model of corporate governance●Practice systems: fair presentation versus legalcompliance accounting--Why national accounting distinctions are becoming blurredImportance of stock markets as a source of finance is growing.Dual financial reporting is becoming more common, particularly where duality is sanctioned.Some code law countries are shifting responsibility for accounting standard setting to the private sector.---Fair presentation accountingSubstance over form.Oriented toward decision needs of external investors. Helps judge managerial performance and predict future cash flows and profitabilityExtensive disclosuresIFRS are aimed at fair presentation.Found in U.K., U.S., Netherlands and countries influenced by them.The trend for consolidated financial statements.----Legal compliance accountingDesigned to satisfy government-imposed requirements, such as:Calculating taxable incomeComplying with macroeconomic planConservative measurementsIncome smoothingWill persist in code law countries for individual-company financial statementsSome questions:1.the chapter identifies seven economic,sociohistorical,and institutional factors believed to influence accounting development.explain how each one affects accounting practice.Sources of finance. Where capital markets/shareholders are the principal source of finance, accounting focuses on profitability, stewardship, and a fair presentation of results and financial position. There are high levels of disclosure in published financial statements. When banks are the principal source of finance, accounting tends to be conservative and disclosures are usually relatively low (banks have direct access to information). When governments are the principal source of finance, accounting is aimed at the information needs of government agencies such as tax collection, assembling macroeconomic statistics, or compliance with macroeconomic goals.Legal system. Accounting in code law countries tends to be highly prescriptive, detailed, and procedural, designed to cover every possible circumstance. Accounting standards are a part of national laws. Accounting in common law countries is more adaptive and innovative and tends to allow more judgment to suit the circumstance. Accounting standards are set in the private sector.Taxation. This tends to parallel the legal system. In common law countries (where accounting standards are set by the accounting profession), accounting and taxation are separate. In code law countries (where accounting standards are national laws), accounting and taxation are essentially the same.Political and economic ties. Accounting technology and expertise is imported and exported based on the contacts that nations have with each other through commerce, conquest, etc.Inflation. Historical cost accounting is the basis for initially recording transactions around the world. Inflation puts stress on the historical cost principle. Where inflation is high, accounting adjusts recorded amounts to reflect price level changes.Level of economic development. This factor defines the difficulty and types of the accounting issues that are faced in a nation. Accounting is complex where business transactions are complex (in highly developed economies); it is simpler where transactions are simpler (in less developed countries).Education levels. This factor defines the limits of accounting sophistication in a nation. Accounting cannot get very sophisticated where education levels are relatively low (unless the country imports accounting training or its citizens are sent elsewhere for it).2.how do cultural values influence accounting?Culture underlies institutional and other arrangements in a nation that directly affect accounting development. Individualism, power distance, and uncertainty avoidance are likely to be the most important influences. Individualism, small power distance, and weak uncertainty avoidance tend to be correlated with and found in common law countries with fair presentation accounting. There is a strong accounting profession, accountants rely on professional judgment, and capital markets are the principal source of finance. Collectivism, large power distance, and strong uncertainty avoidance tend to be correlated with and found in code law countries with legal compliance accounting. The profession is relatively weak - accounting is influenced by law, instead. Accounting is more conservative and prescriptive, and banks and governments are the principal sources of finance.3.what is the major accounting classifications in the world? The chapter discusses three major accounting classifications. The first is the one by Mueller(1967):•Macroeconomic approach, whereaccounting practice is designed toenhance macroeconomic goals;•Microeconomic approach, whereaccounting develops from theprinciples of microeconomics;•Independent discipline approach,where accounting develops frombusiness practices based on judgmentand trial-and-error; and•Uniform approach, where accountingis standardized so it can be used as atool of administrative control bycentral government.The second classification is the one based on legal systems, which closely parallels the third classification based on practice systems. Generally speaking, the features of common law accounting (legal system) are those described for fair presentation accounting (practice system). The features of code law accounting (legal system) are those described for legal compliance accounting (practice system).Fair presentation (common law) emphasizes substance over form and is oriented toward the decision needs of external investors. Thus, it is capital markets oriented. Financial statements help investors judge managerial performance and predict future cash flows and profitability. Extensive disclosures provide additional relevant information for these purposes.Legal compliance (code law) accounting is designed to satisfy government-imposed requirements such as calculating taxable income or complying with the national government’s macroeconomic plan. The income amount may also be the basis for dividends paid to shareholders and bonuses paid to employees. Conservative measurements ensure that prudent amounts are distributed and smooth income brings stable tax, dividend and bonus payouts.As noted above, fair presentation accounting is associated with common law countries, while legal compliance accounting is associated with code law countries. However, many companies from code law countries now follow International Financial Reporting Standards in their consolidated financial statements. IFRS are based on the principles of fair presentation.4.Why national accounting distinctions are becoming blurredImportance of stock markets as a source of finance is growing.Dual financial reporting is becoming more common, particularly where duality is sanctioned.Some code law countries are shifting responsibility for accounting standard setting to the private sector.Chapter 3:IFRS in the European UnionStarting in 2005, all EU-listed companies must follow IFRS in their consolidated financial statements.Generally, IFRS consolidated statements are permitted for non-listed companies.Requirements for individual company financial statements vary – IFRS may be required, allowed, or prohibited.IFRS are based on fair presentation principlesFranceOverview---“The Plan” – national uniform chart of accounts (national accounting code)Objectives and principles of financial reporting Definitions of elementsRecognition and valuation rulesStandardized chart of accountsModel financial statements--Other influences on French accounting rules Commercial legislation (Code de Commerce)Tax laws●Accounting regulation and enforcement---CNC – National Accounting BoardKeeps plan currentMakes rulings and recommendations on accounting issues ---CRC – Accounting Regulation CommitteeConverts CNC rulings and recommendations into binding regulations---AMF – Financial Markets AuthoritySupervises securities markets.---OEC – Institute of Public AccountantsRepresents the accounting profession.Members prepare financial statements, and provide tax, information systems, and management advisory services.---CNCC – National Institute of Statutory Auditors Members audit and give an opinion on financial statements. Must report criminal acts to the High Council of External Auditors.Substantial overlap in OEC and CNCC membership. Statutory auditors not allowed to provide accounting services to the same client.AMF oversees audits of listed companies, but relies on a committee of the CNCC to conduct audit-quality reviews.●Unusual features of French financial reportingMust report results of environmental activitiesReports aimed at preventing bankruptciesSocial reportGermany●Overview---Creditor protectionConservative balance sheet valuationsReserves as protection against unforeseen risks and insolvencyAccounting is designed to compute a prudent income amount that leaves creditors unharmed after distributions are made to owners---Influence of tax lawDetermination principle: taxable income is determined by what is boo ked in a company’s financial records---Reliance on statutes and court decisions●Accounting regulation and enforcement---German Commercial Code (HGB)Applies to all business entities---German Accounting Standards BoardDevelops recommendations for consolidated financial statements---Financial Reporting Enforcement PanelEnforces compliance with German financial reporting requirements and IFRS by listed companies---Chamber of AccountantsOversees WPs (“enterprise examiners”)●Unusual features of German financial reporting Auditor’s private report to board of directors and supervisory board on company’s future prospectsCzech Republic●OverviewAccounting changed directions several times in 20th century, reflecting the country’s political historyUntil end of World War II – German influencesAfter World War II – Soviet influencesAfter 1989 – EU influences (market orientation)●Accounting regulation and enforcementMinistry of FinanceOversees Commercial Code (modeled on German commercial law)Oversees Accountancy Act (based on EU directives) Chamber of AuditorsOversees auditors●Unusual features of Czech financial reportingForm over substance still applies in some casesStill implementing accounting practices consistent with EU directives and IFRSThe Netherlands●OverviewAccounting paradoxesPermissive requirements, but high professional practice standardsCode law country whose accounting is oriented toward fair presentationFair presentation orientation developed without a strong stock market●Other influences on Dutch accountingU.K. and U.S. as much as continental European countries Accounting professionBusiness economics (microeconomics)IASB●Accounting regulation and enforcement---Company law – Act on Annual Financial Statements---Dutch Accounting Standards BoardDevelops guidelines on generally acceptable accounting standards---Enterprise ChamberEnforces compliance with accounting requirements---NIvRAOversees auditing profession●Unusual features of Dutch financial reporting Financial statements may be in Dutch, French, German, or EnglishOther than consolidated financial statements of Dutch listed companies, financial statements may be based on Dutch guidelines, IFRS, or a combinationFlexible accounting measurementsCurrent values are permitted for tangible assets Opportunities for income smoothingUnited Kingdom●Overview---Legacy of British accountingFirst country to develop an accountancy professionFair presentation (true and fair view)Exported British accounting around the world●Accounting regulation and enforcement---Companies ActBroad financial reporting framework---Financial Reporting Council oversees:Accounting Standards BoardIssues Financial Reporting Standards (FRSs)UITF clarifies FRSsAuditing Practices BoardIssues auditing standardsFinancial Reporting Review PanelEnforces compliance with FRSsProfessional Oversight BoardOversees auditing professionAudit Inspection UnitMonitors the audit of listed companiesAccountancy Investigation and Discipline BoardInvestigates and disciplines accountants for professional misconduct●Unusual features of British accountingTrue and fair overrideSome questions in chapter 3pare and contrast the mechanisms for regulating and enforcing financial reporting in the five countries discussed in this chapter.Regulating and enforcing financial reporting is a government function in France. The National Accounting Board (CNC) and the Accounting Regulation committee (CRC) set accounting standards under the jurisdiction of the Ministry of Economy and Finance. The Financial Markets Authority (AMF) ensures compliance with French accounting rules (for listed companies). It is also a government agency.Public and private sector bodies are involved in the regulation and enforcement of financial reporting in Germany. The German Accounting Standards Board is a private sector body that develops German reporting standards for consolidated financial statements. However, German law (the HGB) governs financial statements at the individual company level. Enforcement also involves private and public sector bodies. The Financial Reporting Enforcement Panel is a private sector body that investigates compliance and relies on companies to voluntarily correct any problems that it finds. Matters that cannot be resolved are referred to the Federal Financial Supervisory Authority, a government agency, for final resolution.The regulation and enforcement of financial reporting is in the public sector in the Czech Republic. The Ministry of Finance is responsible for setting accounting principles and it also oversees the Czech Securities Commission which is responsible for enforcing compliance with Czech requirements. Some observers question the effectiveness of the Czech system.A private sector group is responsible for regulating financial reporting in the Netherlands. The Dutch Accounting Standards Board issues guidelines on acceptable accounting principles. Enforcement is handled by the Enterprise Chamber, a special accounting court. It rules on whether companies have used acceptable accounting practices, but only after an interested party has brought a complaint. The Financial Reporting Supervision Division of the Netherlands Authority for Financial Markets is responsible for enforcing reporting requirements for listed companies. Regulation of financial reporting is in the private sector in the United Kingdom. The Accounting Standards Board determines Financial Reporting Standards. The authority of the ASB is set out in the law. Two groups are responsible for enforcing financial reporting standards,one in the private sector and the other in the public sector. The Financial Reporting Review Panel (private sector) and the Department of Trade and Industry (public sector) can investigate complaints about departures from accounting standards. If necessary, they can go to court to force companies to revise its financial statements.2.Auditor oversight bodies have recently been established in several countries discussed in this chapter,identify the auditor oversight bodies discussed in this chapter.The recently established auditor oversight bodies discussed in this chapter are:France –Haut Conseil du Commissariat aux Comptes (High Council of External Auditors)Netherlands –Netherlands Authority for Financial MarketsUnited Kingdom – Professional Oversight BoardThe oversight body in France is in a government agency, while the one in the U.K. is a private sector body. The Dutch body is an autonomous administrative authority under the Ministry of Finance. They are a response to recent accounting scandals and represent efforts to the tighten control over auditors.3.What is the role of tax legislation on financial accounting practices in each of the five countries discussed in this chapter?Tax legislation is a significant influence on local accounting requirements in France and Germany. It is unimportant in the Netherlands and United Kingdom. Tax legislation haslimited influence in the Czech Republic. Given that Czech accounting is still evolving, taxlaw can be expected to fill in areas where accounting standards are missing.4.the most novel feature of the dutch accounting scene is the enterprise chamber of the court of justice of Amsterdam.what is the mission of the enterprise chamber?how is this mission carried out?The Dutch Enterprise Chamber of the Court of Justice of Amsterdam helps ensure that filed or published Dutch financial statements conform to all applicable laws. Shareholders, employees, trade unions, or public prosecutors may bring proceedings to the Chamber by alleging that officially filed or published financial statements do not conform to applicable requirements. The Enterprise Chamber carries out its mission by determining whether the allegations of deficient financial reporting are true and how material such deficiencies are.Depending upon the case, the Chamber may require that financial statements be modified or it may seek penalties through the Court of Justice.The Chamber is composed of three judges and two Dutch RAs. There is no jury. Appeals of any of the Chambers rulings are difficult, may only be lodged with the Dutch Supreme Court, and are restricted to points of law.5.a feature of British accounting is the true and fair override. What is the meaning of this term?British financial statements must present a “true and fair view” of a company’s financial position and results of operations. The intent is similar to the U.S. “presents fairly.” However, the “presents fairly” test in the United States is whether financial statements conform to U.S. GAAP. The “true and fair” test in the United Kingdom requires auditors to step back and see whether the financial statements – taken as a whole – result in a fair presentation. U.K. GAAP may be overridden if complying with them would result in an “unfair” presentation. In other words, judgment is exercised in determining whether the financial statements are true and fair.Chapter 4United States●Overview---Financial Accounting Standards Board (FASB)Private-sector organization that determines accounting standardsThe Securities and Exchange Commission (SEC) – a governmental agency –underpins FASB’s authority---Public Company Accounting Oversight Board (PCAOB) Private organization overseen by the SECRegulates audits and auditors of public companiesIn 2002, took over the responsibility for setting auditing standards from the American Institute of Certified Public Accountants (AICPA)---Financial statements “present fairly”Compliance with GAAP is the test for fair presentation●Accounting regulation and enforcement---Securities and Exchange CommissionHas jurisdiction over listed companiesRelies on private sector (FASB) to set accounting standards Pressures FASB on the direction of accounting standards---Financial Accounting Standards BoardConceptual Framework is a significant feature of。