International Accounting and Multinational Enterprises

Lee Radebaugh, Ph.D., is the Director of the School of Accountancy and Information Systems and KPMG Professor of Accounting at Brigham Young University. In addition, he is the Executive Director of the BYU Center for International Business Education and Research (CIBER). Professor Radebaugh is co-author of International Business Environments and Operations and International Accounting and Multinational Enterprises, and is the co-author of seven books on Canada-U.S. trade and investment relations. In 1998 he was named the "Outstanding International Educator" of the International Section of the American Accounting Association, and "International Person of the Year" by the World Trade Association of Utah. Sidney J. Gray, Ph.D., is Professor of International Business and Head of the School of International Business in the Faculty of Commerce and Economics at the University of New South Wales. He is also foundation Co-Director of the Australian Centre for International Business(a collaborative venture with the University of Melbourne). Professor gray has published in many leading journals around the world, and is the author/co-author of a number of books, including International Accounting and Multinational Enterprises and Financial Accounting: A Global Approach. In 1994 he as named "Outstanding International Accounting Educator" by the American Accounting Association.

• Chapter 1 International Accounting and International Business 1Introduction 1The International Development of the Accounting Discipline 2National Differences in Accounting Systems 5The Evolution and Significance of International Business 6Forms of International Involvement 9Environmental Influences on Accounting 15Major Development Factors 18Accountability and Multinational Enterprises 24Accounting Aspects of International Business 25The Field of International Accounting 26Summary 29Case: Toyota’s Global ExpansionCase: Ahold and the Challenges of Going GlobalThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 2 International Accounting Patterns, Culture and Development 34Introduction 34Purposes of International Classification 35Classification of Accounting and Reporting Systems 35Cultural Influences on Accounting Systems 41Culture, Societal Values, and Accounting 42International Pressures for Accounting Change 52Summary 54Case: General Motors and Japanese Convergence vs. Chinese ConvergenceCase: Inductive Methods and Deductive Methods Relating Reporting Standards to Cultural ValuesThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 3 Comparative International Financial Accounting I 60Introduction 60Anglo-American Accounting 62Nordic Accounting 65Germanic Accounting 67Latin Accounting 70Asian Accounting 72Summary 74Case: Reporting Standards vs. Tax StandardsCase: EU ConversionThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 4 Comparative International Financial Accounting II 79Introduction 79Anglo-American Accounting 82Latin Accounting 83Asian Accounting 85Eastern European Accounting 88Summary 91Case: Small GAAP vs. Large GAAPCase: Developing CountriesThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 5 International Financial Statement Analysis 95Introduction 95International Accounting Differences and Financial Statement Analysis 96Major Differences in Accounting Principles Around the World 99The Impact of U.S.-U.K. Accounting Differences: A Quantitative Analysis 103A Global Perspective on Earnings Measurement 106A Comparative Global Analysis 108International Accounting Differences and the Stock Market 109Factors Influencing Measurement Differences 109Global Accounting Convergence 110Summary 110Case: Alcatel and LucentCase: Hanson and ICIThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 6 International Transparency and Disclosure 124Introduction 124The Meaning of Transparency 125Disclosure in Corporate Reports 126International Disclosure Regulation 135Corporate Reporting Trends 139Corporate Review Information 139Operations Review 143Financial Review 144Frequency and Timeliness of Reporting 145Growing Pressures for Transparency 145Summary 145Case: Infosys Technologies (India)Case: Stora Enso and the Versel Vision—A Model of SustainabilityThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 7 International Accounting Standards and Global Convergence 151Introduction 151Governments 153Trade Unions and Employees 167Investors 169Bankers and Lenders 171Accountants and Auditors 171The International Harmonization and Disclosure Debate 182Summary 183Case: European Adoption of IFRSCase: IAS 39These cases can be found on the following website: www.wiley.com/college/radebaughChapter 8 International Business Combinations, Goodwill, and Intangibles 189Introduction 190Consolidated Financial Statements 190Funds and Cash Flow Statements 197Joint Venture Accounting 199Goodwill and Intangibles 200Goodwill 202Brands, Trademarks, Patents, and Related Intangibles 209Research and Development 213Summary 216Case: Multigroup (Switzerland)Case: Vodafone’s OperationsThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 9 International Segment Reporting 223Introduction 223Users and Uses of Segment Information 224The Benefits of Segment Reporting 225The Costs of Segment Reporting 226International Financial Reporting Standards 227Regulations around the World 228Segment Reporting Problems 231The Dual-Yardstick Proposal 234Summary 241Case: BMWCase: NestléThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 10 Accounting for Foreign Currency 246Introduction 246Basics in Foreign Exchange 247Foreign Currency Transactions 250Translation of Foreign Currency Financial Statements 254Translation Methodologies: An Overview 255International Accounting Standards 257Historical Development in the United States 257Convergence 274Summary 274Case: Kamikaze EnterprisesCase: Coca-ColaThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 11 International Accounting for Price Changes 284Introduction 284Impact of Inflation on the Corporation 285Accounting Measurement Alternatives 286International Financial Reporting Standards 289Comparative National Regulation and Practice 291Problems and Prospects 298Summary 299Case: BPCase: Fosters Brewing GroupThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 12 Corporate Governance and Control of Global Operations 303Introduction 303Global Strategic Issues 304Informal and Subtle Mechanisms 308Organizational Structure 308Corporate Governance 313International Importance of Governance 316Studies on International Corporate Governance Practices 317Cross National Differences in Corporate Governance 322Internal Controls 326The Role of Information Technology in MNEs 328Firm Strategy, Structure, and the Accounting Function 332Summary 334Case: P&G and Unilever—Restructuring for GrowthCase: The Royal Dutch/Shell ScandalThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 13 Managing Foreign Exchange Exposure 342Introduction 342Foreign Exchange 343Types of Hedging Exposure 353Hedging Strategies 356Accounting for Foreign Currency Derivatives 360Use of Derivatives to Hedge a Net Investment 369Disclosure of Derivative Financial Instruments 369Summary 371Case: Nokia’s Foreign Exchange ExposureCase: RadCo InternationalThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 14 International Budgeting and Performance Evaluation 380Introduction 380The Strategic Control Process 381Empirical Studies of Differences in Management Accounting and Control Practices Across Nations 382Challenges of Control in the Global Firm 390Intracorporate Transfer Pricing 397Performance Evaluation Issues 403Economic Value Added 405The Balanced Scorecard 407Summary 409Case: Niessen ApparelCase: Global TelecomThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 15 International Auditing Issues 420Introduction 420The Accounting and Auditing Profession 421Global Audit Services and the International Auditing Challenge 422Audit Challenges: Local Business Practices and Customs 424Audit Challenges: Currency, Language, and Law 425Audit Challenges: Distance and Organization for Providing Audit Services 425Audit Challenges: Audit Impediments from International Diversity,Availability, and Training of Auditors 427Global Accounting Firms 430Audit Standards 434Summary 455Case: Lucas International: Coordinating an International AuditCase: Xerox CorporationThese cases can be found on the following website: www.wiley.com/college/radebaughChapter 16 International Taxation Issues 464Introduction 464Direct Taxes 465Indirect Taxes 468The Avoidance of Double Taxation of Foreign Source Income 469U.S. Taxation of Foreign Source Income 471Tax Effects of Foreign Exchange Gains and Losses 475Tax Incentives 477Tax Dimensions of Expatriates 478Intracorporate Transfer Pricing 479Tax Planning in the International Environment 482Summary 483Case: Transfer PricingCase: Midwest UniformsThese cases can be found on the following website: www.wiley.com/college/radebaughName and Company Index 489Subject Index 493

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