Exam 19: International Accounting and Finance Issues

Parmalat engaged in financial statement fraud in part to divert funds to family-owned businesses.

According to the accounting concept of mutual recognition,companies are required to reconcile financial statements to local GAAP.

A condition that is conducive to low transfer prices from the parent company to the subsidiary and high transfer prices from the subsidiary to the parent company is where the corporate income tax is lower in the subsidiary's country than in the parent country.

________ is an approach to performance measurement that closely links the strategic and financial perspectives of a business.

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

What is the role of the controller in an MNE? What are some of the challenges that a controller faces in an international environment?

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

Gavin Pharmaceuticals is a U.S.-based MNE.Which of the following is probably Gavin's most important metric when evaluating the firm's performance?

Which of the following perspectives would LEAST likely be considered in a balanced scorecard?

Germanic countries tend to be more transparent than the United States and the United Kingdom in terms of financial reporting due to their reliance on bank financing.

Explain the difference between macro-uniform-based and micro-based accounting systems.What are some examples of countries that fit in each system?

Translation of foreign currency financial statements is best described as ________.

The balanced scorecard is ________.

What is the LEAST likely reason that MNEs set arbitrary transfer prices?

Ericsson,the Swedish MNE,was required as of 2005 to adopt both Swedish and U.S.GAAP since it lists it securities in both the U.S.and Sweden.

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?

As a Japanese MNE,Sony is more likely to use ________ to evaluate performance of its foreign operations.

At Cooper Industries,Jake is responsible for evaluating potential acquisitions abroad,managing cash flow,tax planning,and internal auditing.Which of the following is most likely Jake's position at Cooper?

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