Financial Accounting
7th Edition
ISBN: 9781118162286
Author: Kimmel, Paul D.
Publisher: John Wiley & Sons Inc
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 2, Problem 2.3BYP
(a)
To determine
International accounting standards
International accounting standards are the common accounting standards followed by the countries across the world for ease of business, and to eradicate the shortcomings of the accounting standards followed locally to be adopted for international business transactions. But the IFRS (International Financial Recording Standards) differs in some aspects with GAAP (Generally Accepted Accounting Principles).
To discuss: The reasons behind favoring the switch to IFRS by the larger companies, big accounting firms, and rule makers.
(b)
To determine
To discuss: The reasons which are given by many smaller companies that oppose the switch.
(c)
To determine
To discuss: The criticism of IFRS which is raised with regard to the regulated companies.
(d)
To determine
To explain: The concept of condorsement.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The global financial crisis (GFC) of 2007–2009 generated a great deal of discussion about the potential deficiencies in financial accounting practices used in many countries, particularly within_______.
Select one alternative:
England
Poland
New Zealand
the USA
International Financial Reporting Standards are gaining support around the globe. In 2007, the
SEC eliminated the requirement for foreign companies that issue stock in the United States to
include in their financial statements a reconciliation of IFRS to U.S. GAAP. There also is serious
discussion of allowing U.S. companies to choose whether to prepare their financial statements
according to U.S. GAAP or IFRS.
Required:
Do you think U.S. companies should be allowed the choice of reporting under either U.S. GAAP
or IFRS? Provide arguments both for and against this idea.
What has been the main thrust of recent changes in the financial reporting rules following the financial scandals of Enron, Worldcom,
etc.?
Multiple Choice
To improve internal control over companies' financial reporting.
To add to the work of the companies' external accountants.
To force the companies to disclose more of their internal information.
To provide incentives to increase their net income.
< Prev
27 of 50
Next
Chapter 2 Solutions
Financial Accounting
Ch. 2 - What is meant by the term operating cycle?Ch. 2 - Define current assets. What basis is used for...Ch. 2 - Prob. 3QCh. 2 - Prob. 4QCh. 2 - Prob. 5QCh. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - Prob. 8QCh. 2 - What do these classes of ratios measure? (a)...Ch. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - (a) What is the primary objective of financial...Ch. 2 - Prob. 14QCh. 2 - Prob. 15QCh. 2 - Prob. 16QCh. 2 - Prob. 17QCh. 2 - Prob. 18QCh. 2 - What is the economic entity assumption? Give an...Ch. 2 - Prob. 20QCh. 2 - The following are the major balance sheet...Ch. 2 - Prob. 2.2BECh. 2 - BE2-3 The following information (in millions of...Ch. 2 - Prob. 2.4BECh. 2 - Prob. 2.5BECh. 2 - Prob. 2.6BECh. 2 - Prob. 2.7BECh. 2 - Prob. 2.8BECh. 2 - Prob. 2.9BECh. 2 - Here are some qualitative characteristics of...Ch. 2 - Prob. 2.11BECh. 2 - Prob. 2.1DIRCh. 2 - Prob. 2.2DIRCh. 2 - Prob. 2.3DIRCh. 2 - The following characteristics, assumptions,...Ch. 2 - Prob. 2.1ECh. 2 - The major balance sheet classifications are listed...Ch. 2 - E2-3 Suppose the following items were taken from...Ch. 2 - E2-4 Suppose the following information (in...Ch. 2 - Prob. 2.5ECh. 2 - Prob. 2.6ECh. 2 - Prob. 2.7ECh. 2 - E2-8 These financial statement items are for...Ch. 2 - Nordstrom, Inc. operates department stores in...Ch. 2 - Prob. 2.10ECh. 2 - Prob. 2.11ECh. 2 - Prob. 2.12ECh. 2 - Prob. 2.13ECh. 2 - Prob. 2.1APCh. 2 - Prob. 2.2APCh. 2 - Prob. 2.3APCh. 2 - Prob. 2.4APCh. 2 - P2-5A Here and on page 84 are financial statements...Ch. 2 - Prob. 2.6APCh. 2 - Prob. 2.7APCh. 2 - Prob. 2.8APCh. 2 - P2-1B Suppose the following items are taken from...Ch. 2 - Prob. 2.2BPCh. 2 - Prob. 2.3BPCh. 2 - Prob. 2.4BPCh. 2 - Prob. 2.5BPCh. 2 - Prob. 2.6BPCh. 2 - Prob. 2.7BPCh. 2 - Prob. 2.8BPCh. 2 - Prob. 2.1BYPCh. 2 - Prob. 2.2BYPCh. 2 - Prob. 2.4BYPCh. 2 - Prob. 2.3BYPCh. 2 - Prob. 2.7BYPCh. 2 - Prob. 2.8BYPCh. 2 - ETHICS CASE At one time, Boeing closed a giant...Ch. 2 - In what ways does the format of a statement of...Ch. 2 - Prob. 2.2IFRSCh. 2 - IFRS2-3 What terms commonly used under IFRS are...Ch. 2 - Prob. 2.4IFRSCh. 2 - Prob. 2.5IFRSCh. 2 - Prob. 2.6IFRSCh. 2 - Prob. 2.7IFRSCh. 2 - Prob. 2.8IFRS
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Which statement is most TRUE regarding Corporate Social Responsibility (CSR) Reporting as of April, 2022? [Most choices are blatantly, outrageously false. This is a fluid area so next year the answer may be different] a. In the U.S., the PCAOB exercises responsibility for setting CSR standards. b. There are no requirements for CSR Reporting for publicly-traded U.S. companies c. In the U.S., the SEC has delegated standard-setting for CSR to the AICPA. d. The FASB has agreed to endorse the use of IASB standards, by U.S. companies, for their CSR reportsarrow_forwardEthical problems seem to be an issue in finance in the current global business environment. Several websites, like Bloomberg and CNN Money, have analyzed and discussed various financial scandals. Take a look at some of these articles and pro- vide a summary of bad practices of some of the major organizations involved in the scandals. Include instances from different countries, like the Volkswagen emissions scandal, the Toshiba accounting scandal, and the Libor scandal.arrow_forwardOne of your clients has recently read about the goal of converging to International Accounting Standards and they are concerned about what impact it may have on their company. 1. Discuss some of the costs that a company might incur as part of its converging with International Accounting Standards. 2. Discuss why it might be important to your client to adopt International Accounting Standards even though they are currently only operating domestically throughout the central part of the United States.arrow_forward
- The following statement appeared in a financial magazine: “RRA—or Rah-Rah, as it’s sometimes dubbed—has kicked up quite a storm. Oil companies, for example, are convinced that the approach is misleading. Major accounting firms agree.” What is RRA? Why might oil companies believe that this approach is misleading?arrow_forward''Corporate Failures following the 2001 Enron crisis had common failure factors according to the report of the PAIB of IFAC (IFAC 2004). These problems did not disappear after 2004 and were also prevalent during the Global Financial Crisis (GFC)''. Read the extract above and write an essay highlighting the following points: Identify and discuss at least three common corporate failure factors post-Enron crisis and also explain three lessons that body corporates learnt from the Global Financial Crisis thus, by supporting your explanations with relevant examples from cases of corporate failures and also discuss your understanding on the continued evolution of corporate governance.arrow_forwardThe SEC is trying to get companies to notify the investment community more quickly when a "material change" will affect their forthcoming financial results. In what sense might a financial manager be seen as "more ethical" if he or she follows this directive and issues a press release indicating that sales will not be as high as previously anticipated? A manager at a "Check Into Cash" business (see Focus on Ethics box on page 192) defends his business practice as simply "charging what the market will bear." "After all," says the manager, "we don't force people to come in the door." How would you respond to this ethical defense of the payday-advance business? Bond rating agencies have invested significant sums of money in an effort to determine which quantitative and nonquantitative factors best predict bond defaults. Furthermore, some of the raters invest time and money to meet privately with corporate personnel to get nonpublic information that is used in assigning the issue's bond…arrow_forward
- 2.Explain the environmental factors that lead to national differences in accounting. 3.What are the two main legal systems operating worldwide? How might these affect accounting? Countries that rely on capital markets for finance, as opposed to banks and governments, are likely to expect greater levels of public disclosure in their accounting systems. Evaluate this argument and provide examples. 5.Outline and discuss three cultural aspects that can differ across countries. How do these cultural differences relate to differences in accounting systems? 6.What does accounting harmonisation mean? Differentiate harmonisation from convergence or adoption. 7.Explain the benefits of global adoption of IFRSs. 8. Outline the key challenges of US GAAP and IFRS convergence.arrow_forwardIn June 2001, in Oman, the Capital Market Authority issued the Corporate Governance Code, applicable to companies whose securities are listed on the Muscat Securities Market.The Code, drawn from codes of best practices from around the world but adapted to the local market, seeks to promote a "culture of compliance, transparency and accountability without limiting business initiative. Answer the following three questions Which of the following is not one of the International code of Corporate Governance? On retiring, a Chief Executive should become a chairman. At least half the board, excluding the chairman, should comprise non-executive directors Levels of remuneration should be sufficient to attract and retain directors The role of Chairman and chief executive officer should be separatedarrow_forwardIn June 2001, in Oman, the Capital Market Authority issued the Corporate Governance Code, applicable to companies whose securities are listed on the Muscat Securities Market.The Code, drawn from codes of best practices from around the world but adapted to the local market, seeks to promote a "culture of compliance, transparency and accountability without limiting business initiative. Answer the following three questions . 30. Which of the following is not one of the International code of Corporate Governance? a. The role of Chairman and chief executive officer should be separated b. On retiring, a Chief Executive should become a chairman. c. At least half the board, excluding the chairman, should comprise non-executive directors d. Levels of remuneration should be sufficient to attract and retain directorsarrow_forward
- A current issue before the Financial Accounting Standards Board (FASB) is whether accounting standards should be moving from rule-based standards to principle-based standards. Rule-based standards provide specific measurements guidelines that are currently used to classify investment securities (for example, less than 20%, from 20% to 50%, and over 50%). Principle-based standards rely on general principles such as significant influence or control of a company, without any more detailed guidelines. You are the chief financial officer for a large corporation, and FASB just issued a request for comment on a proposed change from the current standard to a principle-based standard. Choose the standard that best meets the business need and justify your choice. Evaluate and defend whether your choice would change if you were an investor in the company.arrow_forwardThe following comments were made at an Annual Conference of the Financial Executives Institute (FEI).There is an irreversible movement toward the harmonization of financial reporting throughout the world. The international capital markets require an end to:1. The confusion caused by international companies announcing different results depending on the set of accounting standards applied.2. Companies in some countries obtaining unfair commercial advantages from the use of particular national accounting standards.3. The complications in negotiating commercial arrangements for international joint ventures caused by different accounting requirements.4. The inefficiency of international companies having to understand and use a myriad of different accounting standards depending on the countries in which they operate and the countries in which they raise capital and debt. Executive talent is wasted on keeping up to date with numerous sets of accounting standards and the never-ending changes…arrow_forwardRegarding Enron, this was a company that resulted in the creation of the Sarbanes-Oxley Act and many reforms to the accounting profession. Research the company and answer the following questions. Question 1: How did the members of the accounting firms violate the standards of integrity and credibility? Question 2: Do you believe the new standards that resulted from the Enron scandal to be adequate? Question 3: Name and explain two aspects of the Sarbanes - Oxley Act of 2002.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Business Its Legal Ethical & Global EnvironmentAccountingISBN:9781305224414Author:JENNINGSPublisher:Cengage
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Business Its Legal Ethical & Global Environment
Accounting
ISBN:9781305224414
Author:JENNINGS
Publisher:Cengage
Business Diversification; Author: GreggU;https://www.youtube.com/watch?v=50-d__Pn_Ac;License: Standard Youtube License