International Accounting and Multinational Enterprises

by Radebaugh, Lee H.; Gray, Sidney J.

• ISBN13: 9780471506348
• ISBN10: 0471506346
• Format: Hardcover
• Copyright: 1993-07-01
• Publisher: John Wiley & Sons Inc

Summary

International accounting has never been so exciting. Not only is the pace of international business, finance, and investment rapidly increasing, but we are also moving closer than ever before toward a convergence of accounting standards worldwide.

Author Biography

Ervin L. Black is an Associate Professor at Brigham Young University. Sidney J. Gray teaches and researches international business strategy, cross-cultural management, and international accounting at the University of Sydney, Australia, where he is a Professor and Head of the School of Business. Lee H. Radebaugh is the KPMG Professor in the School of Accountancy at Brigham Young University.

Table of Contents

International Accounting and International Business	p. 1
Introduction	p. 1
The International Development of the Accounting Discipline	p. 2
National Differences in Accounting Systems	p. 5
The Evolution and Significance of International Business	p. 6
Forms of International Involvement	p. 9
Environmental Influences on Accounting	p. 15
Major Development Factors	p. 18
Accountability and Multinational Enterprises	p. 24
Accounting Aspects of International Business	p. 25
The Field of International Accounting	p. 26
Summary	p. 29
International Accounting Patterns, Culture and Development	p. 34
Introduction	p. 34
Purposes of International Classification	p. 35
Classification of Accounting and Reporting Systems	p. 35
Cultural Influences on Accounting Systems	p. 41
Culture, Societal Values, and Accounting	p. 42
International Pressures for Accounting Change	p. 52
Summary	p. 54
Comparative International Financial Accounting I	p. 60
Introduction	p. 60
Anglo-American Accounting	p. 62
Nordic Accounting	p. 65
Germanic Accounting	p. 67
Latin Accounting	p. 70
Asian Accounting	p. 72
Summary	p. 74
Comparative International Financial Accounting II	p. 79
Introduction	p. 79
Anglo-American Accounting	p. 82
Latin Accounting	p. 83
Asian Accounting	p. 85
Eastern European Accounting	p. 88
Summary	p. 91
International Financial Statement Analysis	p. 95
Introduction	p. 95
International Accounting Differences and Financial Statement Analysis	p. 96
Major Differences in Accounting Principles Around the World	p. 99
The Impact of U.S.-U.K. Accounting Differences: A Quantitative Analysis	p. 103
A Global Perspective on Earnings Measurement	p. 106
A Comparative Global Analysis	p. 108
International Accounting Differences and the Stock Market	p. 109
Factors Influencing Measurement Differences	p. 109
Global Accounting Convergence	p. 110
Summary	p. 110
International Transparency and Disclosure	p. 124
Introduction	p. 124
The Meaning of Transparency	p. 125
Disclosure in Corporate Reports	p. 126
International Disclosure Regulation	p. 135
Corporate Reporting Trends	p. 139
Corporate Review Information	p. 139
Operations Review	p. 143
Financial Review	p. 144
Frequency and Timeliness of Reporting	p. 145
Growing Pressures for Transparency	p. 145
Summary	p. 145
International Accounting Standards and Global Convergence	p. 151
Introduction	p. 151
Governments	p. 153
Trade Unions and Employees	p. 167
Investors	p. 169
Bankers and Lenders	p. 171
Accountants and Auditors	p. 171
The International Harmonization and Disclosure Debate	p. 182
Summary	p. 183
International Business Combinations, Goodwill, and Intangibles	p. 189
Introduction	p. 190
Consolidated Financial Statements	p. 190
Funds and Cash Flow Statements	p. 197
Joint Venture Accounting	p. 199
Goodwill and Intangibles	p. 200
Goodwill	p. 202
Brands, Trademarks, Patents, and Related Intangibles	p. 209
Research and Development	p. 213
Summary	p. 216
International Segment Reporting	p. 223
Introduction	p. 223
Users and Uses of Segment Information	p. 224
The Benefits of Segment Reporting	p. 225
The Costs of Segment Reporting	p. 226
International Financial Reporting Standards	p. 227
Regulations Around the World	p. 228
Segment Reporting Problems	p. 231
The Dual-Yardstick Proposal	p. 234
Summary	p. 241
Accounting for Foreign Currency	p. 246
Introduction	p. 246
Basics In Foreign Exchange	p. 247
Foreign Currency Transactions	p. 250
Translation of Foreign Currency Financial Statements	p. 254
Translation Methodologies: An Overview	p. 255
International Accounting Standards	p. 257
Historical Development in the United States	p. 257
Convergence	p. 274
Summary	p. 274
International Accounting for Price Changes	p. 284
Introduction	p. 284
Impact of Inflation on the Corporation	p. 285
Accounting Measurement Alternatives	p. 286
International Financial Reporting Standards	p. 289
Comparative National Regulation and Practice	p. 291
Problems and Prospects	p. 298
Summary	p. 299
Corporate Governance and Control of Global Operations	p. 303
Introduction	p. 303
Global Strategic Issues	p. 304
Informal and Subtle Mechanisms	p. 308
Organizational Structure	p. 308
Corporate Governance	p. 313
International Importance of Governance	p. 316
Studies on International Corporate Governance Practices	p. 317
Cross National Differences in Corporate Governance	p. 322
Internal Controls	p. 326
The Role of Information Technology in MNEs	p. 328
Firm Strategy, Structure, and the Accounting Function	p. 332
Summary	p. 334
Managing Foreign Exchange Exposure	p. 342
Introduction	p. 342
Foreign Exchange	p. 343
Types of Hedging Exposure	p. 353
Hedging Strategies	p. 356
Accounting for Foreign Currency Derivatives	p. 360
Use of Derivatives to Hedge a Net Investment	p. 369
Disclosure of Derivative Financial Instruments	p. 369
Summary	p. 371
International Budgeting and Performance Evaluation	p. 380
Introduction	p. 380
The Strategic Control Process	p. 381
Empirical Studies of Differences in Management Accounting and Control Practices Across Nations	p. 382
Challenges of Control in the Global Firm	p. 390
Intracorporate Transfer Pricing	p. 397
Performance Evaluation Issues	p. 403
Economic Value Added	p. 405
The Balanced Scorecard	p. 407
Summary	p. 409
International Auditing Issues	p. 420
Introduction	p. 420
The Accounting and Auditing Profession	p. 421
Global Audit Services and the International Auditing Challenge	p. 422
Audit Challenges: Local Business Practices and Customs	p. 424
Audit Challenges: Currency, Language, and Law	p. 425
Audit Challenges: Distance and Organization for Providing Audit Services	p. 425
Audit Challenges: Audit Impediments from International Diversity, Availability, and Training of Auditors	p. 427
Global Accounting Firms	p. 430
Audit Standards	p. 434
Summary	p. 455
International Taxation Issues	p. 464
Introduction	p. 464
Direct Taxes	p. 465
Indirect Taxes	p. 468
The Avoidance of Double Taxation of Foreign Source Income	p. 469
U.S. Taxation of Foreign Source Income	p. 471
Tax Effects of Foreign Exchange Gains and Losses	p. 475
Tax Incentives	p. 477
Tax Dimensions of Expatriates	p. 478
Intracorporate Transfer Pricing	p. 479
Tax Planning in the International Environment	p. 482
Summary	p. 483
Name and Company Index	p. 489
Subject Index	p. 493
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