Exam 19: International Accounting and Finance Issues

Currency is a major issue in financial reporting because companies must decide in which currency to present their financial information to the general public.

When using the current-rate method to translate foreign currency financial statements into the parent currency, translation gains and losses are recognized in comprehensive income.

The accounting value that illustrates how companies are more liberal in their recognition of income is ________.

An exchange rate variance results from ________.

The standard-setting organization tasked with the challenge of determining one set of accounting standards that can be used worldwide is the ________.

In regards to accounting, what is the impact of the SEC and Sarbanes-Oxley Act on international business?

How do exchange rates affect budgets used to evaluate performance in MNEs?

The global integration of capital markets ________.

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

Sources of influence on accounting standards and practices include all of the following EXCEPT ________.

Which term refers to how companies value assets such as inventory?

The ________ is the number of years it will take a firm to recover from its initial investment.

German companies like Deutsche Bank and DaimlerChrysler have been relatively optimistic and transparent in their financial reporting compared with many Germanic companies because ________.

When using a budget for foreign operations, it is important for the parent company to select an exchange rate to set the budget and use that same rate to evaluate performance.

Japanese companies are more likely to use sales as a measure of performance evaluation of foreign operations than income-based measures.

Germany's accounting system has historically been a ________ system.

The degree of caution companies display in valuing assets and recognizing income is known as ________.

If a U.S.-based MNE translates its German subsidiary's financial statements from euros into dollars using the current-rate method, how would it recognize translation gains and losses?

In 2002, the ________ required adoption of International Financial Reporting Standards (IFRS)by 2005.

According to U.S.GAAP, companies recognize transaction gains and losses in the income statement.