International versus U.S. Accounting Standards

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Research and compare international and U.S. accounting standards. This will enable you to see how the different reporting methods affect business and how product costs are affected by international business.

The learning objectives of this report are as follows:

1. Compare and contrast basic U.S. and international financial accounting standards.

2. Explain how key international factors affect business reporting.

3. Identify key compliance and regulatory requirements.

Using the Unit IV Research Report Template, prepare a four- to five-page written report with at least three scholarly sources covering the items listed below.

Introduction

Part 1: Select financial statements for two related (e.g., computer manufactures, pharmaceutical companies, cell phone companies, etc.) businesses; one that uses U.S. accounting reporting and the other that uses international accounting reporting. Identify the following items:

-Provide the name, location, and accounting standards used for each business. -Compare and contrast three major differences you see in the way the financial data is presented on the financial statements. -Identify which set of financial statements you think is the easiest to understand and provides you with most accurate cost data as a manager. (Do not forget to look at the notes to the financial statements also.)

Part 2: Analyze and discuss three international factors you think would affect the cost of the products made at the companies you selected and why.

Part 3: Discuss any compliance and/or regulatory issues you think would be involved in the companies you have selected as they relate to the cost of the products made. For example, are there strict regulations on product pricing, tariffs imposed on raw materials needed to make the products, or strict regulations on the wages paid to workers?

Conclusion and Recommendations

Sample Solution

International versus U.S. Accounting Standards

Systems of accounting, or accounting standards, are guidelines and regulations issued by governing bodies. They dictate how a company records its finances, how it presents its financial statements, and how it accounts for things such as inventories, depreciation, and amortization. The International Accounting Standards Board (IASB) is the accounting standards body for the International Financial Responding Standards (IFRS). Generally accepted accounting principles (GAAP) is the standard adopted by the Securities and Exchange Commission (SEC) in the US. IFRS is a principle of the standard-based approach and is used internationally, while GAAP is a rule-based system compiled in the U.S. The IASB does not set GAAP, nor does it have any legal authority over GAAP.

k and welcome contrast to the three aged and failing general secretaries of the Communist Party”, which clearly illustrates how Gorbachev was completely different to leaders like Brezhnev, Andropov and Chernenko. Gorbachev was 54 and “in robust health”, which meant that he was energetic, young and less set in his ways as leader. He was ultimately more open to ideas compared to previous leaders, so change was already taking place. Oberdorfer argues that Gorbachev was a strong leader as he had more potential to induce change compared to other leaders as since 1972, “there has never been a time when a politically strong U.S. president and a physically strong Soviet general secretary had been in office at the same time”. Oberdorfer highlights there has been 13 years of weak, unhealthy leaders attempting to mend the economy and negotiate with other countries. Oberdorfer calls Gorbachev an “impressive leader” which enforces his central argument: Gorbachev’s leadership was the main reason for the end of the Cold War.

Furthermore, Oberdorfer depicts how Gorbachev was a family man and how he appreciated his wife since he took her “wherever possible”, which clearly shows he valued his wife’s opinion, in contrast to other leaders such as Reagan who didn’t take Nancy with him wherever he went, implying he was strongly opinionated. Gorbachev was a man who was interested in the public’s opinion in order to induce changes tailored on their opinions and preferences, not solely based on his own. The Secretary of State George Shultz observed how “He performs like a person who has been in charge for a while, not like a person who is just taking charge” which illustrates Gorbachev as an extremely adaptable, unforeseeable, hardworking and diplomatic individual. Gorbachev’s leadership was the main factor that led to the end of the Cold War because he w

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