Question 1

How would a company decide which foreign languages will be used to present its financial statements?

Accepted Answer

A) Determine which language is closest to the local language so that translation is less costly. 
B) Choose the language based on which countries provide the greatest potential source of funds. 
C) Follow the language requirements of its local accounting regulatory agency. 
D) Select the language of the most populous country in its region of the world. 
A) Determine which language is closest to the local language so that translation is less costly. 
B) Choose the language based on which countries provide the greatest potential source of funds. 
C) Follow the language requirements of its local accounting regulatory agency. 
D) Select the language of the most populous country in its region of the world. B

Question 2

During the 1990's,a major problem in evaluating the financial statements of Eastern European companies that had been under the control of the Soviet Union was:

Accepted Answer

A) that the statements had been used for government planning rather than for private investors. 
B) that few people spoke the languages in which the financial statements were written. 
C) that East European currencies had been greatly devalued relative to the U.S.dollar. 
D) that financial reporting had not been done since the Bolshevik Revolution. 
A) that the statements had been used for government planning rather than for private investors. 
B) that few people spoke the languages in which the financial statements were written. 
C) that East European currencies had been greatly devalued relative to the U.S.dollar. 
D) that financial reporting had not been done since the Bolshevik Revolution. A

Question 3

What information would most likely NOT be available on the EDGAR system?

Accepted Answer

A) Form 10-K for a U.S.corporation listed on the New York Stock Exchange (NYS
E)  
B) quarterly financial statements for a foreign corporation listed on the American Stock Exchange (AMEX) 
C) the annual report for a corporation listed only on the London and Tokyo stock exchanges 
D) the notes to the financial statements of a foreign corporation listed on the NYSE 
A) Form 10-K for a U.S.corporation listed on the New York Stock Exchange (NYS
E)  
B) quarterly financial statements for a foreign corporation listed on the American Stock Exchange (AMEX) 
C) the annual report for a corporation listed only on the London and Tokyo stock exchanges 
D) the notes to the financial statements of a foreign corporation listed on the NYSE C

Question 4

What is the probable reason that many foreign countries provide convenience translations of their financial statements into English?

Accepted Answer

A) U)S.GAAP is the most widely used set of financial accounting standards. 
B) Globalization of capital markets has increased the demand for English language financial statements. 
C) England is the home of more multinational corporations than any other country. 
D) The Securities and Exchange Commission requires all foreign companies doing business in the U.S.to provide English translations. 
A) U)S.GAAP is the most widely used set of financial accounting standards. 
B) Globalization of capital markets has increased the demand for English language financial statements. 
C) England is the home of more multinational corporations than any other country. 
D) The Securities and Exchange Commission requires all foreign companies doing business in the U.S.to provide English translations.

Question 5

Which of the following is true about reconciling foreign financial statements to U.S.GAAP?

Accepted Answer

A) A 10% increase in income when converting to U.S.GAAP means that stockholder's equity will increase by 10% after converting to U.S.GAAP. 
B) A 10% increase in income when converting to U.S.GAAP means that stockholder's equity will increase by 20% after converting to U.S.GAAP. 
C) A 10% increase in income when converting to U.S.GAAP means that stockholder's equity will decrease by 10% after converting to U.S.GAAP. 
D) None of the above statements is true. 
A) A 10% increase in income when converting to U.S.GAAP means that stockholder's equity will increase by 10% after converting to U.S.GAAP. 
B) A 10% increase in income when converting to U.S.GAAP means that stockholder's equity will increase by 20% after converting to U.S.GAAP. 
C) A 10% increase in income when converting to U.S.GAAP means that stockholder's equity will decrease by 10% after converting to U.S.GAAP. 
D) None of the above statements is true.

Question 6

Which of the following is a reason for analyzing the financial statements of foreign corporations?

Accepted Answer

A) making credit decisions about foreign customers 
B) evaluating international business combinations 
C) diversifying an investment portfolio 
D) All of the above are reasons for analyzing foreign financial statements. 
A) making credit decisions about foreign customers 
B) evaluating international business combinations 
C) diversifying an investment portfolio 
D) All of the above are reasons for analyzing foreign financial statements.

Question 7

If an analyst saw a "Monetary Position Loss" in a company's annual report,where would that company be located?

Accepted Answer

A) The Netherlands 
B) Mexico 
C) China 
D) Sweden 
A) The Netherlands 
B) Mexico 
C) China 
D) Sweden

Question 8

For U.S.companies whose shares are publicly traded on U.S.stock exchanges,how long after year-end must annual reports be filed with the Securities and Exchange Commission (SEC)?

Accepted Answer

A) 6 months 
B) 90 days 
C) 60 days 
D) 30 days 
A) 6 months 
B) 90 days 
C) 60 days 
D) 30 days

Question 9

In order to address accounting diversity,financial analysts have adopted which of the following strategies?

Accepted Answer

A) limiting the geographic spread of their investments 
B) taking a diversification strategy within a foreign country 
C) investing only in foreign government bonds 
D) all of the above 
A) limiting the geographic spread of their investments 
B) taking a diversification strategy within a foreign country 
C) investing only in foreign government bonds 
D) all of the above

Question 10

What U.S.term was equivalent to "inventories" as it was used in financial statements of companies located in the United Kingdom,prior to adoption of IFRS in 2005?

Accepted Answer

A) operating assets 
B) consumables 
C) stocks 
D) merchandise 
A) operating assets 
B) consumables 
C) stocks 
D) merchandise

Question 11

Why is investing in foreign companies an effective way to diversity an individual's investment portfolio?

Accepted Answer

A) Foreign economies are stronger than the U.S.economy. 
B) Foreign stocks are less risky than the stocks of U.S.corporations. 
C) Stock returns of companies in foreign companies are highly correlated with stock returns of U.S.companies. 
D) Returns on foreign company stocks do not always change in the same direction as returns on U.S.stocks. 
A) Foreign economies are stronger than the U.S.economy. 
B) Foreign stocks are less risky than the stocks of U.S.corporations. 
C) Stock returns of companies in foreign companies are highly correlated with stock returns of U.S.companies. 
D) Returns on foreign company stocks do not always change in the same direction as returns on U.S.stocks.

Question 12

Timeliness of financial statements varies across nations. Which of the following countries has financial statements issued closest to year-end (on average)?

Accepted Answer

A) Japan 
B) Germany 
C) Canada 
D) Italy 
A) Japan 
B) Germany 
C) Canada 
D) Italy

Question 13

In order to appropriately analyze the trends in foreign financial statement data,which exchange rates should be used?

Accepted Answer

A) historical exchange rates 
B) beginning of year exchange rates 
C) current exchange rates 
D) average exchange rates 
A) historical exchange rates 
B) beginning of year exchange rates 
C) current exchange rates 
D) average exchange rates

Question 14

Which of the following is likely to affect an analyst's ability to make meaningful comparisons of financial statement ratios for companies in different countries?

Accepted Answer

A) accounting diversity 
B) varying business traditions 
C) unique terminology 
D) all of the above 
A) accounting diversity 
B) varying business traditions 
C) unique terminology 
D) all of the above

Question 15

The debt ratio of Dynasty Industries,a Japanese corporation,is 62%. Why might this be difficult to compare to the debt ratio of a U.S.manufacturing corporation?

Accepted Answer

A) U)S.companies generally have debt ratios greater than 62%. 
B) U)S.companies generally have debt ratios less than 62%. 
C) Japanese financing preferences may be different from American preferences. 
D) Japanese companies report assets and liabilities in yen,whereas U.S.companies report in dollars. 
A) U)S.companies generally have debt ratios greater than 62%. 
B) U)S.companies generally have debt ratios less than 62%. 
C) Japanese financing preferences may be different from American preferences. 
D) Japanese companies report assets and liabilities in yen,whereas U.S.companies report in dollars.

Question 16

What would be a logical first step that should be taken to restate foreign financial statements to conform to U.S.GAAP,assuming a four-column worksheet will be used to post debit and credit adjustments and reclassifications to arrive at U.S.GAAP statements?

Accepted Answer

A) Convert the foreign currency amounts to U.S.dollars. 
B) Restate historical costs to current cost basis. 
C) Re-order foreign financial statements to U.S.format. 
D) Determine the amount of foreign exchange gains or losses. 
A) Convert the foreign currency amounts to U.S.dollars. 
B) Restate historical costs to current cost basis. 
C) Re-order foreign financial statements to U.S.format. 
D) Determine the amount of foreign exchange gains or losses.

Question 17

Foreign companies listed on U.S.stock exchanges must reconcile their net income and stockholders' equity to U.S.GAAP. Which ratios can be calculated with the information provided in this reconciliation?

Accepted Answer

A) operating profit margin 
B) asset turnover 
C) return on equity 
D) current ratio 
A) operating profit margin 
B) asset turnover 
C) return on equity 
D) current ratio

Question 18

What steps can be taken by an analyst to alleviate the timeliness problem encountered in comparing financial statements between countries that have different time frames for reporting?

Accepted Answer

A) Use interim financial statements instead of annual reports. 
B) Convert all financial statement items to a common year using current exchange rates. 
C) Request financial statements from foreign corporations as soon as they are available. 
D) Nothing can be done by the analyst do deal with this challenge. 
A) Use interim financial statements instead of annual reports. 
B) Convert all financial statement items to a common year using current exchange rates. 
C) Request financial statements from foreign corporations as soon as they are available. 
D) Nothing can be done by the analyst do deal with this challenge.

Question 19

What is OIBD?

Accepted Answer

A) This is the Organization of International Boards of Directors,which is attempting to harmonize accounting standards. 
B) It stands for "operating income before depreciation," which some analysts use to remove the effect of international accounting standard diversity. 
C) It is the Organization of International Bond Dealers,whose financial analysts developed EBITDA. 
D) None of the above. 
A) This is the Organization of International Boards of Directors,which is attempting to harmonize accounting standards. 
B) It stands for "operating income before depreciation," which some analysts use to remove the effect of international accounting standard diversity. 
C) It is the Organization of International Bond Dealers,whose financial analysts developed EBITDA. 
D) None of the above.

Question 20

Which is NOT one of the common sources of distortions in financial statements?

Accepted Answer

A) accounting standards that are inconsistent with economic reality 
B) management estimation errors 
C) miscalculation of foreign currency translation 
D) management of earnings 
A) accounting standards that are inconsistent with economic reality 
B) management estimation errors 
C) miscalculation of foreign currency translation 
D) management of earnings

How would a company decide which foreign languages will be used to present its financial statements?

During the 1990's,a major problem in evaluating the financial statements of Eastern European companies that had been under the control of the Soviet Union was:

What information would most likely NOT be available on the EDGAR system?

What is the probable reason that many foreign countries provide convenience translations of their financial statements into English?

Which of the following is true about reconciling foreign financial statements to U.S.GAAP?

Which of the following is a reason for analyzing the financial statements of foreign corporations?

If an analyst saw a "Monetary Position Loss" in a company's annual report,where would that company be located?

For U.S.companies whose shares are publicly traded on U.S.stock exchanges,how long after year-end must annual reports be filed with the Securities and Exchange Commission (SEC)?

In order to address accounting diversity,financial analysts have adopted which of the following strategies?

What U.S.term was equivalent to "inventories" as it was used in financial statements of companies located in the United Kingdom,prior to adoption of IFRS in 2005?

Why is investing in foreign companies an effective way to diversity an individual's investment portfolio?

Timeliness of financial statements varies across nations. Which of the following countries has financial statements issued closest to year-end (on average)?

In order to appropriately analyze the trends in foreign financial statement data,which exchange rates should be used?

Which of the following is likely to affect an analyst's ability to make meaningful comparisons of financial statement ratios for companies in different countries?

The debt ratio of Dynasty Industries,a Japanese corporation,is 62%. Why might this be difficult to compare to the debt ratio of a U.S.manufacturing corporation?

What would be a logical first step that should be taken to restate foreign financial statements to conform to U.S.GAAP,assuming a four-column worksheet will be used to post debit and credit adjustments and reclassifications to arrive at U.S.GAAP statements?

Foreign companies listed on U.S.stock exchanges must reconcile their net income and stockholders' equity to U.S.GAAP. Which ratios can be calculated with the information provided in this reconciliation?

What steps can be taken by an analyst to alleviate the timeliness problem encountered in comparing financial statements between countries that have different time frames for reporting?

What is OIBD?

Which is NOT one of the common sources of distortions in financial statements?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters

Exam 10: Analysis of Foreign Financial Statements

How would a company decide which foreign languages will be used to present its financial statements?

During the 1990's,a major problem in evaluating the financial statements of Eastern European companies that had been under the control of the Soviet Union was:

What information would most likely NOT be available on the EDGAR system?

What is the probable reason that many foreign countries provide convenience translations of their financial statements into English?

Which of the following is true about reconciling foreign financial statements to U.S.GAAP?

Which of the following is a reason for analyzing the financial statements of foreign corporations?

If an analyst saw a "Monetary Position Loss" in a company's annual report,where would that company be located?

For U.S.companies whose shares are publicly traded on U.S.stock exchanges,how long after year-end must annual reports be filed with the Securities and Exchange Commission (SEC)?

In order to address accounting diversity,financial analysts have adopted which of the following strategies?

What U.S.term was equivalent to "inventories" as it was used in financial statements of companies located in the United Kingdom,prior to adoption of IFRS in 2005?

Why is investing in foreign companies an effective way to diversity an individual's investment portfolio?

Timeliness of financial statements varies across nations. Which of the following countries has financial statements issued closest to year-end (on average)?

In order to appropriately analyze the trends in foreign financial statement data,which exchange rates should be used?

Which of the following is likely to affect an analyst's ability to make meaningful comparisons of financial statement ratios for companies in different countries?

The debt ratio of Dynasty Industries,a Japanese corporation,is 62%. Why might this be difficult to compare to the debt ratio of a U.S.manufacturing corporation?

What would be a logical first step that should be taken to restate foreign financial statements to conform to U.S.GAAP,assuming a four-column worksheet will be used to post debit and credit adjustments and reclassifications to arrive at U.S.GAAP statements?

Foreign companies listed on U.S.stock exchanges must reconcile their net income and stockholders' equity to U.S.GAAP. Which ratios can be calculated with the information provided in this reconciliation?

What steps can be taken by an analyst to alleviate the timeliness problem encountered in comparing financial statements between countries that have different time frames for reporting?

What is OIBD?

Which is NOT one of the common sources of distortions in financial statements?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters