choi_intacct07_ppt04

1、Choi/Meek, 7/e1International Accounting, 7/eFrederick D.S. ChoiGary K. MeekChapter 4: Comparative Accounting: The Americas and AsiaChoi/Meek, 7/e2Learning ObjectiveslUnderstand how financial reporting is regulated and enforced in five countries of the Americas and Asia: the U.S., Mexico, Japan, Chin

2、a, and India.lDescribe the key similarities and differences among the accounting systems of these five countries.lDescribe the auditor-oversight mechanisms in these five countries.lExplain the difference between principles-based and rules-based accounting standards.Choi/Meek, 7/e3Choi/Meek, 7/e4Unit

3、ed StateslOverviewlFinancial Accounting Standards Board (FASB)lPrivate-sector organization that determines accounting standardslThe Securities and Exchange Commission (SEC) a governmental agency underpins FASBs authoritylPublic Company Accounting Oversight Board (PCAOB)lPrivate organization overseen

4、 by the SEClRegulates audits and auditors of public companieslIn 2002, took over the responsibility for setting auditing standards from the American Institute of Certified Public Accountants (AICPA)lFinancial statements “present fairly”lCompliance with GAAP is the test for fair presentationChoi/Meek

5、, 7/e5United States (contin)lAccounting regulation and enforcementlSecurities and Exchange CommissionlHas jurisdiction over listed companieslRelies on private sector (FASB) to set accounting standardslPressures FASB on the direction of accounting standardslFinancial Accounting Standards BoardlConcep

6、tual Framework is a significant feature of accounting standard settinglStandard setting in the U.S. is both political and technicallGenerally accepted accounting principles (GAAP) are voluminous and detailedlCommitted to converging U.S. GAAP with IFRSlSarbanes-Oxley Act (2002)lExpanded requirements

7、on corporate governance, disclosure and reporting, and the regulation of the audit professionlEstablished PCAOBSets standards for auditorsOversees and inspects audit firmsSanctions auditors for defective worklCEO and CFO must certify financial statementslManagement must assess internal controlslAudi

8、tors express an opinion on internal controlsChoi/Meek, 7/e6United States (contin)lUnusual features of U.S. financial reportinglNo federal law for preparing financial statements or having them audited, except for listed companieslLIFOlRules-based GAAP versus principles-based GAAPlRules-basedMore spec

9、ific requirementsMore detailed implementation guidanceMay result in more comparabilityMay foster “check-the-box” mentalitylPrinciples-basedSets forth broad objectives and fundamentalsRequires professional judgment for implementationMore flexibleMay result in more divergence in practiceChoi/Meek, 7/e

10、7Choi/Meek, 7/e8Choi/Meek, 7/e9MexicolOverviewlAccounting is oriented toward fair presentation despite code law legal systemlGeneral price-level accounting (inflation-adjusted financial statements) was a fundamental feature until 2008lListed companies will use IFRS starting in 2012lAccounting profes

11、sion is well-developed and influential in setting accounting and auditing standardslAccounting regulation and enforcementlCouncil for Research and Development of Financial Information Standards (CINIF)lIndependent public/private-sector partnership patterned after FASB and IASBlDetermines Mexican GAA

12、PlAim align Mexican GAAP with IFRSlMexican Institute of Public AccountinglIssues auditing standards through its Auditing Standards and Procedures CommissionlUnusual features of Mexican financial reportinglFinancial statements are adjusted for inflation when three-year cumulative inflation rate equal

13、s or exceeds 26 percentChoi/Meek, 7/e10JapanlOverviewlStrong bureaucratic control over business, including accountinglStructural reforms under waylKeiretsu business model being transformedlAccounting “big bang” to improve transparencylListed companies may voluntarily adopt IFRS starting in 2010 and

14、required adoption expected around 2015Choi/Meek, 7/e11JapanlAccounting regulation and enforcementlTriangular legal systemlCompany LawAdministered by Ministry of JusticeCreditor and shareholder protection the fundamental principlelSecurities and Exchange LawAdministered by Financial Services AgencyFo

15、r publicly owned companiesProviding information for investment decision-making the main objectivelCorporate Income Tax LawExpenses must be booked to be claimed for tax purposeslAccounting Standards Board of JapanlPrivate-sector organizationlResponsible for developing accounting standardslModeled aft

16、er FASB and IASBlConvergence with IFRS a major goallTook over from the Business Accounting Council (a government agency) in 2001lJapanese Institute of Certified Public AccountantslProvides guidance on conduct of auditlBusiness Accounting Council lResponsible for auditing standardslCertified Public A

17、ccountant and Auditing Oversight BoardlGovernment agencylMonitors and oversees the auditing professionChoi/Meek, 7/e12Japan (contin)lUnusual features of Japanese financial reportinglForecasts of cash flows, capital investments, and production in statutory filingsChoi/Meek, 7/e13ChinalOverviewlEmbrac

18、ing IFRS as part of structural market reformslMinistry of Finance responsible for all aspects of accounting and auditing Choi/Meek, 7/e14China (contin)lAccounting regulation and enforcementlChinese Accounting Standards CommitteelUnder the Ministry of FinancelResponsible for developing accounting sta

19、ndardslChinese Institute of Certified Public AccountantslUnder the Ministry of FinancelResponsible for developing auditing standards and code of professional ethicslChina Securities Regulatory CommissionlUnder Ministry of FinancelRegulates Chinas two stock exchangeslAccounting Standards for Business

20、 Enterprises (ASBE)lComprehensive framework for accounting and financial reportinglIncludes detailed implementation guidance on accounting issueslLargely in line with IFRSlFirst introduced in 1992 by Ministry of Finance and revised several times sincelUnusual features of Chinese financial reportingl

21、Startling changes since original ASBE in 1992Choi/Meek, 7/e15IndialOverviewlBritish influence on accounting and auditing For example:lTrue and fair viewlIndependent accounting professionChoi/Meek, 7/e16India (contin)lAccounting regulation and enforcementlCompanies ActlBroad framework for accounting and audit