Exam 19: International Accounting and Finance Issues

Under the current-rate method of translation, any gain or loss is known as a(n)________.

U.S.-based MNEs do not like to use the balanced scorecard for evaluation performance because it does not take into consideration international differences.

The International Accounting Standards Board is composed of international securities regulators and is attempting to harmonize accounting standards through issuing International Financial Reporting Standards.

What factors influence international accounting practices? What forces are leading to the global convergence of accounting practices?

Using the same exchange rate to set the budget and monitor results ________.

When using a lead strategy, a company will delay collection of foreign-currency receivables if that currency is expected to strengthen.

Consolidation of financial statements is the process of restating foreign subsidiary financial statements into the GAAP of the parent company.

Translation of foreign currency financial statements is the process of restating foreign currency financial statements from one currency into another.

Assume that a U.S.-based MNE has operations in Germany and that the revenues and expenses are mostly incurred in euros.Which translation method is the MNE most likely to use?

Which legislation has forced companies to establish more stringent internal controls over their financial reporting?

The accounting value that relates to issues such as how to present financial information and discuss financial results is known as ________.

Coca-Cola has subsidiaries all over the world.The process of combining the results of its far-flung operations into one set of financial statements for investors is known as ________.

The most common approach to translate budgets and compare a budget with actual performance uses the ________.

The Financial Accounting Standards Board and International Accounting Standards Board allow firms to use the current-rate method or the temporal method to translate foreign currency financial statements into the currency of the parent company.

The global integration of capital markets is a major force leading to the convergence of accounting standards.

A typical U.S.company uses the following balance sheet format: assets = liabilities + shareholders' equity.

Suzanne, an investor, tends to invest in corporations that are headquartered in countries that value financial transparency.A firm based in which of the following countries would most likely appeal to Suzanne?

A ________ strategy is when a company collects foreign-currency receivables before they are due when the foreign currency is expected to weaken.

U.S.and U.K.companies tend to be more transparent than Japanese companies.

Which of the following countries would be most likely to be classified as high secrecy and conservatism?