国际会计第七版英文版课后答案(第八章)

Chapter 8Global Accounting and Auditing Standards Discussion Questions1.A rgument for measurement:∙Discrepancies in international measurement may produce accounting amounts that are vastly different (even where financial transactions and position are identical), leading to incorrectcomparisons. Here it doesn’t matter what is disclosed; no reliable comparisons are possibleanyway.Arguments for disclosure:∙If companies do not disclose complete information, they can hide losses or future problems from financial statement users. For example, losses can be hidden by offsetting them against gains.Expected future problems related to loss contingencies can be hidden simply by not disclosingthem. Thus, if disclosure is incomplete, even the application of similar measurement principleswill lead to incorrect comparisons.Clearly, international accounting convergence requires that both measurement and disclosure be made comparable.2. The term convergence is associated with the International Accounting Standards Board. Beforethe IASB, harmonization was the commonly used term. Harmonization means that standards are compatible; they do not contain conflicts. Harmonization was generally taken to mean the elimination of differences in existing accounting standards, in other words, finding a common ground among existing standards. Convergence means the gradual elimination of differences in national and international accounting standards. Thus, the terms harmonization and convergence are closely aligned. However, convergence might also involve coming up with a new accounting treatment not in any current standards.3.a. Reciprocity, or mutual recognition, exists when regulators outside of the home country accept aforeign firm’s financial statements based on the home country’s principles, or perhaps IFRS. For example, the London Stock Exchange accepts U.S. GAAP-based financial statements in filings made by non-U.K. foreign companies. Reciprocity does not increase cross-country comparability of financial statements, and it can create an unlevel playing field in that foreign companies may be allowed to apply standards that are less rigorous than those used by domestic companies.b. With reconciliation, foreign firms can prepare financial statements using the accountingstandards of their home country or IFRS, but also must provide a reconciliation between accounting measures (such as net income and shareholders’ equity) of the home country and the country where the financial statements are being filed. Reconciliations are less costly than preparing a full set of financial statements under a different set of accounting principles, but provide only a summary, not the full picture of the enterprise.c. International standards are a result of either international or political agreement, or voluntary (orprofessionally encouraged) compliance. When accounting standards are applied through political, legal, or regulatory procedures, statutory rules typically govern the process. All other international standards efforts in accounting are voluntary in nature.a.A growing body of evidence indicates that the goal of international convergence of accounting,disclosure and auditing has been widely accepted.b.A ll dimensions of accounting are becoming converged worldwide.c.Increasing numbers of highly credible organizations strongly support the goals of the IASB.d.N ational differences in the underlying factors that lead to variation in accounting, disclosure, andauditing practices are narrowing as capital and product markets become more international.e.International standards will improve the comparability of international financial information.f.Time and money will be saved on international consolidations, the components of which now aresubject to different national laws and practices.g.T here may be a tendency for accounting standards throughout the world to be raised to the highestpossible level.h.W idespread application of IFRS might also result in:∙Improved managerial decision making within multinational enterprises.∙Improved allocations of corporate investment money worldwide.∙Better international understandability of financial statements.∙Cost reductions in accounting information processing and financial disclosure costs for multinational enterprises.∙Greater international credibility for published financial statements.a.Accounting has built-in flexibility. Its ability to adapt to widely different situations is one ofits most important features. Critics doubt that international standards can be flexible enoughto handle differences in national backgrounds, traditions, and economic environments, andmay be a politically unacceptable challenge to sovereignty.b.It is claimed that international accounting standard setting is a tactic of the large internationalaccounting service firms to expand their market share.c.International standards may create standards overload for companies that do businessinternationally.d.National political concerns frequently intrude on accounting standards. International politicalinfluences would compromise international accounting standards.e.International standards are not suitable for small and medium-sized companies, particularlyunlisted ones with no public accountability.f.Risks of misinformation — uniform standards may give the appearance of similarities whenin fact countries and companies may be highly dissimilar.g.Political costs of the necessary international treaties on financial accounting and reportingwhich would have to be negotiated to enforce the use of IFRS.6.Evidence indicating wide acceptance of IFRS around the world:a.Growing numbers of companies are adopting IFRS voluntarily and refer to their use of IFRSin their annual reports.b.Dozens of countries base their national accounting standards on IFRS.c.Some 7,000 EU listed companies now use IFRS in their consolidated financial statements.d.Many international organizations, such as IOSCO, endorse the use of IFRS.e.IFRS are used as an international benchmark in many major industrialized countries.f.IFRS are accepted by many stock exchanges and securities regulators.g.IFRS are recognized by the European Commission (EC) and other supranational bodies.h.Norwalk Agreement committed FASB and IASB to convergence.7. The International Accounting Standards Board is overseen by the International Accounting Standards Committee, consisting of 22 trustees: six from North America, six from Europe, six from the Asia-Pacific region, and four from any area. The trustees appoint the members of the IASB. The IASB receives advice from the Standards Advisory Council on its agenda and priorities. The SAC consists of around 30 members appointed by the IASC trustees and they represent a diversity of geographic and professional backgrounds.The IASB consists of 14 members, 12 full-time and two part-time. It follows a due process in setting accounting standards. For each standard, the board normally publishes a discussion paper that sets out the various possible requirements for the standard and the arguments for and against each one. Later, the board publishes an exposure draft for public comment, and it then examines the arguments put forward in the comment process. A final standard is issued when nine of the 14 board members have voted in its favor.8.Accounting harmonization in the EU is just one element of the overall project of harmonizing the legal and economic systems of the member states, and is part of the process of harmonizing company law. The Fourth Directive illustrates the concept of harmonization, and specifies accounting measurement (valuation) and disclosure requirements. It provides format rules for the balance sheet and the profit and loss account. The true and fair view is the overriding requirement and holds for footnote disclosures aswell as the financial statements. The Fourth Directive also sets out the requirements for financial statement audits.The Seventh Directive addresses consolidated financial statements. It requires consolidations for groups of companies above a certain size, specifies disclosures and notes, and requires a directors’ report. When it was issued in 1983, consolidated financial statements were the exception rather than the rule in Europe. The Eighth Directive addressed various aspects of the qualifications of professionals authorized to carry out legally required (statutory) audits. Now referred to as the Statutory Audit Directive, it was substantially amended in 2006. The new directive tightens oversight of the audit profession and has standards for, among other points, auditor appointment and rotation, and continuing professional education.The EU abandoned its approach to harmonization to one favoring the IASB for practical and political reasons. The Fourth and Seventh Directives were incomplete and essentially remained as they were issued. Improvements to them proved difficult to achieve and the directives did not achieve the comparability expected. Some saw a set of Europe-wide standards as an unnecessary redundancy given the emergence of comprehensive IFRS. Others saw U.S. GAAP as a rival to IFRS. The EU cannot influence U.S. GAAP, but can influence IFRS. By putting its weight behind the IASB, the EU could serve as a counterweight to U.S. GAAP.9.International accounting harmonization/convergence should address many, if not most, investor concerns about cross-national differences in accounting practices. The key issue here is comparability –investors want to make ―apples to apples‖ comparisons of financial statements of companies from countries around the world. However, converged standards are only the beginning. Standards must also be comparably applied and they must be rigorously enforced. The financial statements must also be similarly audited to ensure comparable reliability.10.Convergence of auditing standards will help ensure that audit quality will reach acceptable levels worldwide. Auditing convergence may be less difficult to achieve than accounting convergence because auditing is more technically oriented and there is wider agreement as to what constitutes best practices in auditing than there is for accounting principles.IFAC is a worldwide organization of over 160 member organizations in 120 countries. Its mission includes establishing and promoting adherence to high-quality auditing and other professional standards, and furthering the international convergence of such standards. Its work is done through standard setting boards and standing committees. Among its standard setting boards are:∙International Accounting Education Standards Board∙International Auditing and Assurance Standards Board∙International Ethics Standards Board for AccountantsIts work spans the entire array of professional responsibilities of auditors and includes standards covering professional education, the conduct of the audit, and professional ethics.11.IOSCO consists of securities regulators from more than 100 countries. Together, IOSCO members are responsible for regulating more than 90 percent of global securities markets. One of IOSCO’s objectives is promoting ―high standards of regulation in order to maintain just, efficient, and sound markets.‖ IOSCO has worked extensively on international disclosure and accounting standards to facilitate the ability of companies to raise capital efficiently in global securities markets. It has a technical committeewhose sole focus is multinational disclosure and accounting. Model disclosure standards were published in 1998 and 2002.IOSCO’s disclosure harmonization work is important because it has established a set of high quality disclosure standards, globally recognized, that serves as a model for nations around the world as they develop national requirements for cross-border offerings and initial listings.12.The UN and OECD now play supporting roles in harmonizing accounting and auditing standards. The IASB and IFAC are now the clear leaders in this endeavor, but in the 1970s and 1980s, both the UN and OECD were potential rivals. Most of the effort of the UN and OECD is directed toward providing technical accounting assistance to developing countries. For example, the UN has focused much attention on Russia and countries of the former Soviet bloc, and on African countries.Exercises1.One of the main problems with mutual recognition (or reciprocity) is that it actually may make financialstatements within the home market noncomparable. If many different accounting standards are acceptable, then companies domiciled in countries with rigorous standards (such as the United States) would be at a disadvantage to companies whose home country standards are not as stringent, but still would be acceptable. Investors also would face the difficult task of having to master many sets of accounting principles in order to be able to understand the associated financial statements.The U.S. SEC considers reconciliation to be a cost-effective means to allow foreign firms to list on a domestic exchange. With reconciliation, differences between accounting standards are identified and quantified without the need to prepare a second set of financial statements. However, significant differences between domestic and foreign accounting principles can increase the burdens associated with reconciliation, and reconciliations do not provide a full picture of the enterprise as would result from a second set of financial statements.The use of International Financial Reporting Standards would provide many benefits for cross-border listings. Companies would have to provide only one set of financial statements for all nondomestic capital markets, and investors would have to be familiar with only one set of accounting principles to properly understand and interpret nondomestic financial statements. However, as with reconciliation, domestic companies required to comply with domestic standards still would compete for capital with nondomestic companies that would be required to comply with a different (and possibly less stringent) standard.Preferred approaches from perspectives of different groups:a.Investors might prefer international standards, as they would increase the ease in understandinginformation from nondomestic companies. Knowledge of only one set of standards would berequired to understand all nondomestic statements. However, there is also a case forreconciliation, which presents in an economical manner the significant differences betweennondomestic and domestic financial statements and does not require investors to be familiar withany set of accounting standards other than the home country.b.C ompany management might prefer mutual recognition, as it does not require a company to prepareany additional information and requires no additional expense or time commitments. However,companies in some countries might adopt IFRS voluntarily to increase their credibility withinvestors and increase the overall quality of their financial reporting.c.Regulatory authorities might prefer reconciliation as it places the burden on companies yet providesadequate disclosure and investor protection.d.S tock exchanges might prefer convergence as it is the only method that provides truly complete andidentical information disclosure from companies outside the home market.e.Professional associations will take positions according to their constituents –associations ofstockbrokers might prefer convergence to the extent that it would make company informationeasier to understand, whereas associations of company executives might prefer reciprocity.2.The following discussions are based on the respective organizations’ Web sites at the time of writing.International Federation of Accountants (IFAC)IFAC, an organization of national professional accountancy organizations, plays a critical role in the convergence of auditing standards and other international auditing initiatives. The organization has over 160 member organizations in 120 countries, representing more than 2.5 million accountants. Organizedin 1977, IFAC’s goal is to develop the accountancy profession and converge its professional standards worldwide to enable accountants to provide services of consistently high quality in the public interest.To achieve its objective, IFAC develops and promotes technical, professional and ethical standards for accountants, provides leadership on emerging issues, and serves as a voice for the world’s accountants on issues of public and professional concern. IFAC fosters the advancement of strong national professional accountancy organizations, and works closely with regional accountancy organizations and outside agencies to accomplish this.The IFAC Council, comprised of one representative from each member body, provides overall leadership of IFAC. The council elects the IFAC Board, and is responsible setting policy and overseeing IFAC operations, the implementation of programs, and the work of IFAC’s standard setting groups and committees. The Public Interest Oversight Board (PIOB), an independent board, provides additional oversight. Day-to-day administration is provided by the IFAC chief executive located in New York, which is staffed by accounting professionals from around the world.IFAC’s professional work is done through its standard setting boards and standing committees. IFAC standard setting boards are:∙International Accounting Education Standards Board∙International Auditing and Assurance Standards Board∙International Ethics Standards Board for Accountants∙International Public Sector Accounting Standards BoardIFAC standing committees are the following:∙Compliance Advisory Panel∙Developing Nations Committee∙Nominating Committee∙Professional Accountants in Business Committee∙Small and Medium Practices Committee∙Transnational Auditors CommitteeIFAC issues standards in these key areas: auditing, assurance, and related services; education; ethics; and public sector accounting. IFAC’s International Auditing and Assurances Stan dards Board issues International Standards on Auditing (ISA), which are intended for international acceptance. ISAs deal with topics such as auditors’ respo nsibilities, risk assessment and evidence, and audit reporting.IFAC has close ties with organizations such as the IASB and IOSCO, and its pronouncements are receiving growing recognition for their quality and relevance. Financial statements of companies around the world are increasingly being audited in conformity with International Standards on Auditing.United Nations Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR)ISAR was created in 1982 and is part of the United Nations’ Conference on Trade and Development (UNCTAD). ISAR is the only intergovernmental working group devoted to accounting and auditing at the corporate level. Its objective ―is to promote the transparency, reliability and comparability of corporate accounting and reporting as well as to improve disclosures on corporate governance by enterprises in developing countries and countries with economies in transition. ISAR achieves thisthrough an integrated process of research, intergovernmental consensus building, information dissemination and technical cooperation.‖In recent years, ISAR focused on important topics that other organizations were not yet ready to address, such as environmental accounting. It has also conducted technical assistance projects in a number of areas such as accounting reforms and retraining in the Russian Federation, Azerbaijan and Uzbekistan, and designing and developing a long-distance learning program in accountancy for French-speaking Africa. Topics discussed at recent ISAR conferences include practical implementation of IFRS, corporate responsibility reporting, and corporate governance disclosures.Organization for Economic Cooperation and Development (OECD)OECD is the international organization of 30 (mostly industrialized) market economy countries. It functions through its governing body, the OECD Council, and its extensive network of committees and working groups. Its publication Financial Market Trends, issued two times each year, assesses trends and prospects in the international and major domestic financial markets of the OECD area.The OECD often publishes reports on the structure and regulation of securities markets, and has played a leading role in promoting improved corporate disclosure and governance around the world. With its membership consisting of larger, industrialized countries, the OECD is often a counterweight to other bodies (such as the United Nations and the International Confederation of Free Trade Unions) that have built-in tendencies to act contrary to the interests of its members.3.As an example, consider the Financial Accounting Standards Board (FASB) in the United States. The FASB’s Web site presents detailed information on the FASB’s international activities, including an overview, convergence with IASB, cooperative efforts with other standards setters, and the FASB/IASB memorandum of understanding.The FASB’s objective for participating in international activities is to increase the international comparability and the quality of standards used in the United States. This objective is consistent with the FASB’s obligation to its domestic constituents, who benefit from comparability of information across national borders. The FASB pursues that objective in cooperation with the International Accounting Standards Board (IASB) and national standard setters.The FASB believes that the ideal outcome of cooperative international accounting standard-setting efforts would be the worldwide use of a single set of high-quality accounting standards for both domestic and cross-border financial reporting. At present, a single set of high-quality international accounting standards that is accepted in all capital markets does not exist. In the United States, for example, domestic firms that are registrants with the SEC must file financial reports using U.S. GAAP. Foreign firms filing with the SEC can use U.S. GAAP, their home country GAAP, or international standards – although if they use their home country GAAP or international standards, foreign issuers must provide a reconciliation to U.S. GAAP.The FASB engages in a variety of activities in pursuit of the goals of high-quality international standards and increased convergence of the accounting standards used in different nations. Almost every FASB project is a matter of interest in some other country or with the IASB.4. a. Comparison of standard-setting proceduresEuropean UnionAccounting and auditing requirements are established under EU company law directives, which are legal instruments that member countries must implement. Thus, all accounting and auditing standards in EU directives become legally enforceable. The EU comprises several key organizations that need to be understood in order to understand how EU directives come into being. Briefly, the European Commission initiates EU p olicy and acts in the community’s general interest. Commissioners are completely independent and may not seek or take instructions from governments or interest groups. The Council of the European Commission is the EU’s decision-maker. Here, the member states legislate for the EU, deciding some matters by majority vote and others unanimously. The European Parliament represents the EU’s citizens. Its main functions are to enact legislation and to scrutinize and control the use of executive power. The Trea ty of European Union of 1993 strengthened the European Parliament’s responsibilities. Only the Commission can propose new directives. Proposals typically undergo many drafts. Proposed directives are submitted to the Council of the European Commission, which first seeks opinions of the Economic and Social Committee and the European Parliament. Next, a working party set up by the Council discusses the proposal. Member countries typically are allowed several years to implement a new directive after its final adoption. (Note to instructors: The information contained in this paragraph is based on information on the EU’s Web site at the time of writing.)IASBThe IASB follows due process in setting accounting standards. For each standard, the Board may publish a discussion paper that sets out the various possible requirements for the standard and the arguments for and against each one. Subsequently, the Board publishes an exposure draft for public comment, and then examines the arguments put forward in the comment process before deciding on the final form of the standard. An exposure draft and final standard can be issued only when nine (of 14) members of the board vote in favor of it.IFACThe standard setting boards of IFAC also follows a due process procedure. Meetings to discuss the development and approval of standards are open to the public and, where practicable, are broadcast over the Internet. Issues papers and draft standards are published on the IFAC Web site along with updated project summaries and meeting highlights. New projects are based on a review of national and international developments and comments from interested observers. An advisory group is consulted to determine priorities and activities. Task forces are usually assigned the responsibility for the development of new standards. These task forces conduct research and consult interested parties on the issues under consideration. One or more public forums or roundtables may be held before an exposure draft is issued. Re-exposure is sometimes necessary. Final standards are issued after considering comments to the exposure draft. (Note to instructors: The information contained in this paragraph is taken from IFAC’s Web site at the time of writing.)a.At what types and sizes of enterprises are their standards primarily directed?EU company law directives apply both to public and private companies in the EU, withoutrespect to size.IFRS are financial reporting standards for business whose applicability depends on thecontext. For example, if IFRS are adopted as national accounting standards in a particularcountry, their applicability depends on the type of entities that are subject to those nationalstandards.IFAC’s standards are directed toward the audits of both public and private companies.In summary, all three sets of standards are meant to apply to most (if not all) enterprises,without regard to size or whether the enterprises are private or public.b.B rief critique of statementIt is true that IFRS are particularly useful to companies that operate in more than one country,because IFRS are widely recognized and are acceptable in many different countries and stockexchanges. However, as stated in the text, IFRS also are used as the basis for nationalaccounting standards in many countries, and these national standards typically apply to a widerange of companies, not just multinational companies.5. Following is a sample essay on the 1995 European Commission adoption of a new approach to accounting harmonization. The essay is based on material in articles by Gerhard G. Mueller, "Harmonization: Efforts in the European Union," in Frederick D.S. Choi, ed., International Accounting and Finance Handbook, New York: John Wiley & Sons, 1997, page 11.28; and Peter Walton, ―European Harmonization,‖ in Frederick D.S. Choi, ed., International Finance and Accounting Handbook, New York: John Wiley & Sons, 2003, page 17.7Beginning in the early 1990s, the Commission examined a number of alternative harmonization strategies. These included, among others, substantive revisions of the existing accounting Directives, creation of a Europe-wide accounting standards-setting board, exempting certain European companies from all EU accounting requirements so that these companies might apply accounting standards of other jurisdictions, or re-enforce its earlier push for mutual recognition.The reality of international pressures and the need of European multinationals to be listed on several stock exchanges finally made it clear that the creation of a strong European regional level of accounting regulation was simply adding an unnecessary third tier, sandwiched between national regulations and the international capital markets.In the end, the European Commission adopted a new accounting harmonization strategy on November 14, 1995 and forwarded respective recommendations to the European Council and to the European Parliament. The essence of the recommendation is that the EU will support the IASC/IOSCO initiatives and work to bring EU accounting requirements in line with International Accounting Standards (IAS). The Commission decided, after many years of hesitation, to participate in IASC standard setting, although only as an observer.In addition, the new harmonization strategy concentrated on consolidated financial statements. It had come to be realized that harmonization of individual company accounts is not necessarily very useful. This decision endorsed a break of the link between individual company accounts and consolidated accounts.The new European Commission’s strategy for EU accountin g harmonization is a major change from the EU accounting harmonization policies that had been in place over the preceding twenty-five years.6.Note to Instructors: Exhibit 8-3 is current at the time of writing. It would be best for you to log on to the IASB Web site, , and complete this exercise yourself before assigning it to students.。