International versus U.S. Accounting Standards
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.
