Assignment: Project Guidelines
Overview
There seems to be a general misconception that accountants working in many organizations-such as a local CPA firm or an organization that is not publicly traded-will not be impacted by the concerns of international accounting. Globalization, however, continues to shrink the global market into a seemingly smaller playing field, making connections from businesses of any size and location to other businesses even more likely and more crucial. Companies that may not have felt the impact of globalization and these accounting concerns in the past are likely to be feeling them now. This course will approach international accounting concepts and dilemmas critically, examining the differences and impact of conducting business globally.
The purpose of the final project in this course is to foster this critical thinking in regard to key concepts in international accounting. The project will explore the impact of diversity in accounting practices, the differences and impact of generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS), and how international rules and regulations influence business practices.
In this assignment, you will demonstrate your mastery of the following course outcomes:
• Evaluate diversity in accounting practices for their impact on the effectiveness of financial accounting and reporting in a global economy
• Differentiate between generally accepted accounting principles and International Financial Reporting Standards as they apply to the transparency and effectiveness of financial statements
• Assess the implications of the United States converging with International Financial Reporting Standards by critically evaluating the impact it will have on financial reporting in a global economy
• Analyze the process of international financial statement analysis for its impact on the decision-making process in a multinational organization
• Interpret how foreign currency rates impact financial statement creation in accordance with applicable rules and regulations
• Examine the implications of variances in international tax laws on organizational strategy under generally accepted accounting principles and International Financial Reporting Standards reporting requirements
Prompt
For this project, consider this scenario: you have worked very hard and have just earned a promotion at Quality CPA firm. As part of your new responsibilities, you will be advising an influential client on their international aspirations. Their business has been booming and they are seriously considering expanding their operation overseas. They are concerned about the political and financial risks of such an undertaking.
You will build a multimedia presentation (utilizing audio, if possible, with speaker notes to elaborate) that addresses the upper management of this company. You will choose a country other than the United States. This country will be presented as a potential destination for the company, although other countries can be included, as the global market is the focus. The presentation must explore the company's potential expansion into the chosen country, the global market in general, and how the expansion will impact their operations.
Specifically, the following critical elements must be addressed:
I. Global Business: For this part of the assessment, convey to your audience the differences between accounting practices around the world.
A. Explain the influence of environmental issues of diversity on accounting practices.
B. Evaluate the impact of the chosen country's culture on their financial accounting standards.
1. What accounting principles could help inform your response (i.e., Hofstede's dimension of culture, Gray's accounting values, etc.)?
C. Evaluate the impact of potential issues on business operations that may arise when conducting accounting business in the chosen country.
II. Accounting Standards: For this part of the project, explain to your audience the differences between generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS) and the implications in converging with IFRS.
A. Differentiate between the reporting requirements for GAAP and IFRS.
B. Given these differences, determine which reporting standard(s) would be most appropriate for your company, given their desire to expand globally and why they would be appropriate.
C. Distinguish the disclosure requirements for GAAP and IFRS.
D. Given these differences, determine which disclosure standard(s) would be most appropriate for your company given their desire to expand globally, and explain why they would be appropriate.
E. Assess the impact that the convergence of GAAP and IFRS will have on investors of companies in the United States and in the global market.
F. Assess the impact that the convergence of GAAP and IFRS will have on firms similar to your company. In other words, how will its effect on investors and the global market affect the company?
G. Explain the role of International Accounting Standards Board (IASB) in harmonization. How is the board created? In other words, how does this support convergence?
1. What are your thoughts on how this may or may not impact your company?
III. Global Market: For this part of the project, you will explain to your audience the impact that expanding into the global market will have on your decision-making tools and processes.
A. Analyze the potential issues in financial statement analysis when conducting business in the chosen country.
B. Make recommendations on how your company could avoid these financial statement analysis issues.
C. Analyze the international financial statement analysis process for potential benefits. In other words, what would be the benefits of international financial statement analysis despite the potential issues?
IV. International Business Practice: For this part of the project, you will explain the implications of variances in international tax laws on organizational strategy. You will also explain how foreign currency transactions impact financial statement creation in accordance with GAAP.
A. Explain how foreign currency exchange rates will impact the income potential or financial risk of the company given their expansion into the global market.
1. What will this mean for the income and risk of the company?
2. How will foreign currency exchange rates impact financial statements?
B. Make recommendations for tools or strategies the company could use to help mitigate these risks.
C. Explain the benefits of international tax laws or treaties if your company expanded to your chosen country.
D. Provide examples of possible tax incentives offered by countries to attract investments or promote exports.
E. Explain the tax disadvantages that should be considered by your company and your investors when expanding globally.
Milestones
Milestone One: Global Business
In Module Two, you will prepare a draft of the section of your final presentation that covers the topic of global business. Your work should include an emphasis on diversity, culture, and potential issues with conducting accounting business internationally.
Milestone Two: Accounting Standards
In Module Five, you will prepare a draft of the section of your final presentation that covers the topic of accounting standards. Your work should review the different reporting requirements for GAAP and IFRS. From there, you will make a decision about which reporting standard is best for your company as well as which disclosure standards would be most appropriate. You will assess the convergence of GAAP and IFRS, including an explanation of the harmonization role provided by IASB. Finally, you will provide an analysis on how IASB impacts your company.
Milestone Three: Global Market
In Module Seven, you will prepare a draft of the section of your final presentation that covers the topic of the global market. Specifically, you will analyze potential issues in financial statement analysis in your company's country of choice and make a recommendation on how to avoid these issues. You will also weigh the benefits of the international financial statement analysis process.
Milestone Four: International Business Practice
In Module Eight, you will prepare a draft of section of your final presentation that covers the topic of international business practices. You will include an explanation of how foreign currency change rates will impact the company and make recommendations on how to mitigate these risks. You will also touch on the key points of international tax laws, the benefits of tax incentives, and potential tax disadvantages.