Explain the alternative uses of the equity method and how these differ as between US GAAP and IFRS.
> The formats in the appendices to this chapter, relating to three EU countries, all comply with the EU Fourth Directive. Comment on the differences between them.
> Explain how international differences in the ownership and financing of companies could lead to differences in financial reporting.
> Why are leased assets accounted for differently in individual company financial statements in the United Kingdom and France?
> Is it useful to regulate, as for example in France, the keeping of accounting records, as well as the preparation of financial statements?
> Why has the FRC in the United Kingdom decided to converge (partially but not completely) UK standards for individual companies with IFRS for SMEs?
> Compare the composition and the roles of the FRC in the United Kingdom and the ANC in France.
> ‘The UK accountancy profession no longer has any influence on the accounting rules relating to individual financial statements.’ Discuss.
> What are the arguments for and against a national accounting plan?
> What effect, if any, has harmonization in the European Union had on non-member states in Europe?
> Discuss the choice of national charts of accounts in post-communist Russia and Romania.
> Compare the importance of the influences of Anglo-Saxon accounting and continental European accounting in Eastern Europe during the 1990s.
> One of the original aims of the Seventh Directive was to assist with the supervision of multinational enterprises by their host countries. Examine and discuss arguments for and against such a desire for supervision.
> Why is English the leading language of international corporate financial reporting?
> To what extent did the EU Seventh Directive harmonies consolidation accounting between Germany and the United Kingdom?
> ‘The EU Seventh Directive was a much more useful harmonizing tool than the Fourth Directive was.’ Discuss.
> Compare the importance of the influences of Anglo-Saxon accounting and continental European accounting in Eastern Europe and China in the 1990s.
> Which was more successful at harmonization until 2001: the IASC or the European Union?
> Why, and to what extent, has post-Communist Romania adopted Anglo-Saxon rather than French-style corporate financial reporting?
> Why is auditor independence a problem in Central and Eastern Europe?
> From this and earlier chapters, explain how financial reporting profit can differ from taxable income, and how this varies internationally.
> Suggest reasons for the adoption or non-adoption of IFRS for SMEs in China, France, Japan, South Africa and the United States.
> Explain how IFRS for SMEs differs from full IFRS. In your opinion, does it differ enough?
> Imagine that you are a financial analyst used to US or IFRS company statements; what difficulties would be met when assessing Japanese companies?
> Why are some EU companies listed on non-European (especially North American) stock exchanges?
> ‘Japan is unique, so Japanese accounting is unique.’ Discuss.
> Discuss the causes of differences in financial reporting and its regulation (giving relevant examples of the effects) between your own country and Japan.
> Compare and contrast the roles of the JICPA and the AICPA.
> Why did Chinese accounting develop differently from Eastern European accounting in the 1990s?
> From your knowledge of Japanese accounting, what characteristics do you think it has in terms of Gray’s (1988) model?
> Discuss the classification of Japanese accounting in Nobes’ (1998) model (see Figure 3.4). Which features give rise to this classification, and what have Japanese accounting and its environment in common with other countries in this group?
> Discuss the view that political lobbying could and should be reduced by giving preparers more say in the setting of accounting standards.
> Give examples of political lobbying of the IASC/B, explaining why and how lobbying has increased over the years.
> Why might it be expected that there would be more examples of political lobbying relating to the United States than to any other country?
> Discuss the role of a conceptual framework as a defense against political lobbying.
> Why are there more accountants per head of population in New Zealand than in France?
> Is there a connection between the amount of political lobbying in a country and the degree of independence of the standard-setter from (a) government departments and (b) the accountancy profession?
> Discuss the causes of differences in financial reporting and its regulation (giving relevant examples of the effects) between your own country and the United States.
> Which US accounting practices seem out of line with those of many other countries? What explanations are there for this?
> Would you describe the differences between IFRS and US GAAP as ‘major’? Will it be easy for the standard-setters to remove these differences?
> As pointed out in this chapter, the United States and the United Kingdom are reasonably similar with respect to the causes and nature of differences of financial reporting. Identify and discuss factors that may account for the existing differences in pra
> ‘The most important influence on US accounting has been and remains the SEC.’ Discuss.
> To what extent has the scope for different practice under IFRS declined over the past decade?
> ‘The influence of tax on financial reporting cannot be relevant in the context of IFRS consolidated statements.’ Discuss.
> If a translation of IFRS exists in a language with which you are familiar, assess the quality of the translation.
> If it is found that large differences in IFRS practice exist systematically between countries, what implications does this have?
> Which countries historically have been the home countries of MNEs? Are they the same countries from which international accounting firms have originated?
> Compare, as between US GAAP and IFRS, the consolidation of subsidiaries and the calculation and treatment of goodwill on consolidation.
> Explain how the scope of things included in consolidated statements has gradually grown over time under IFRS and US GAAP.
> Outline all the ways that one could in principle include a joint venture in a venturer’s financial statements. Which is the best?
> Explain how assets are measured under IFRS. How could this be improved?
> Are intangible assets recognized sufficiently under IFRS and US rules?
> Under what circumstances should next year’s wages and next year’s repair expenses be charged as expenses this year?
> Examine whether a deferred tax liability arising from temporary differences on the revaluation of an asset meets the IFRS definition of a liability.
> Explain, using various examples, the causes of deferred tax assets and deferred tax liabilities.
> Compare the degrees of prudence found in accounting for employee benefits in Germany, Italy and the United States.
> What factors have led to the establishment of multinational enterprises (MNEs)?
> Explain the differences between an allowance, a liability, a contingent liability, an obligation, a provision, an accrual, a fund and a reserve. State which set of accounting rules you have been using as the context for your answer.
> Explain the difference between ‘hedging’ and ‘hedge accounting’. In each case, what are the arguments in favor of doing them?
> ‘In recent years, the IASB has clearly been moving towards the use of current values rather than historical costs.’ Discuss.
> Explain why it is necessary to define either ‘asset’ or ‘expense’ from first principles, but not both. Why has the IASB chosen to define the former?
> ‘Substance over form is a recipe for failing to achieve comparability between financial statements of different enterprises.’ Discuss.
> Is it necessary and useful to have different valuation bases for different assets?
> Explain the various types of gains and losses included in OCI? Is it possible to identify a principle behind this?
> Access the website of GlaxoSmithKline (www.gsk.com) to explain the differences disclosed in its annual reports between US GAAP and IFRS and UK GAAP from 2004 to 2006. Could these differences (summarized in Tables 1.1 and 1.2) have been smaller if the com
> Explain the arguments for and against allowing the IASB and the FASB to compete in the provision of accounting standards. Which arguments are the stronger?
> Explain the advantages and disadvantages of writing accounting standards containing principles rather than rules.
> What factors have made possible the ‘internationalization’ of the world’s stock markets?
> Is worldwide application of IFRS going to solve the problems of international financial analysis?
> Two approaches to measuring conservatism are discussed in the chapter: the comparison of profit figures under different GAAPs; and asymmetric recognition of good and bad news. What are the advantages and disadvantages of each approach?
> How do preparers and users of annual financial statements of listed companies cope with international differences?
> Why have the UN and the OECD interested themselves in the harmonization of accounting? How have they gone about it?
> Discuss whether the standards of the IASB should be directed to all companies or to some defined subset of companies.
> What arguments are there against the process of international harmonization of accounting?
> The countries listed below are not covered in any detail in the textbook. Which of the six ‘vital’ countries (see Section 4.3.1) does each most closely resemble so far as accounting and corporate financing reporting are concerned? Explain why, referring
> Distinguish between de jure standardization and de facto standardization, giving examples of how one or both of them can be achieved.
> Distinguish between harmony, harmonization and standardization.
> Which of the main models of international classification of accounting do you prefer? Explain your reasoning.
> Which are the top three countries in respect of each of: (a) Share of the world’s top 100 companies. (b) Number of qualified accountants. (c) Market capitalization of stock exchange? Why is the answer not the same for all three questions?
> How would you judge the relative success of attempts to provide classifications in comparative international accounting?
> To what extent is differing national culture relevant to an understanding of the causes of accounting differences and therefore to the process of classification of countries?
> To what extent have the accounting classifications become irrelevant because of international harmonization?
> Do the accounting classifications suggest that there is or was such a thing as Anglo- Saxon accounting?
> When producing classifications in the field of comparative international accounting, what should one be classifying?
> If you were trying to predict which financial reporting regulations and practices would be found in various African countries, which non-accounting variables would you measure?
> Are the international differences in the formats of financial statements a major obstacle to comparing the statements?
> How do the causal factors discussed in the chapter affect corporate governance structures in different countries?
> Discuss the view that the costs of establishing and maintaining accounting standards enforcement bodies are likely in most countries to exceed the benefits.
> Why do the United States and France have stock exchange regulators as accounting standards enforcement bodies, whereas the United Kingdom does not?
> Why is there no pan-European accounting standards enforcement body in the European Union? Ought one to be established?
> Why is it difficult to establish a causal relationship between specific external factors and international differences in accounting? Discuss the methodological problems in identifying possible causes.
> Why have several countries recently introduced auditor oversight bodies? Is this a positive or a negative development?
> ‘Enforcement bodies merely duplicate the work of auditors.’ Discuss.
> A number of companies voluntarily prepare segment reports beyond what is required by regulation. Given the difficulties faced by regulators in developing rules for segment reporting, is regulation really necessary and/or desirable?
> Using segment reporting as an example, explain how standard-setters could use research when planning to impose extra disclosure requirements.
> ‘Research shows that line-of-business reporting is much more useful than geographical segmental reporting.’ Discuss.
> Discuss the view that IFRS 8 ignores the needs of many stakeholders.
> Discuss to what extent segment reporting is beneficial to different user/stakeholder groups.
> In what senses can certain aspects of auditing be described as ‘international’?
> Why do auditing standards differ internationally?
> Discuss the effect that the growth of multinational enterprises has had on audit firms.
