In prior weeks you were asked to report on the following scenarios pertaining to Kobyashi Moru. Remember that each of these scenarios was an independent situation.
• Week 03 - Segment Reporting
• Week 06 - Explanatory and Opinion Paragraphs
• Week 09 - Financial Statements Prepared using Chinese and GAAP Standards
In your research, you found significant conflicting issues between global reporting standards. These affect every audit engagement that addresses books of original entry that utilize foreign GAAP that are translated into financial statements. Your previous coursework has taught you that in order for stakeholders to accurately address financial performance metrics, they have to be based on standards that are consistent and that follow US GAAP rules. Comparative analyses can only take place in an environment of stable, static and consistent rules. Your final project will be to synthesize the issues/data previously researched into a single paper. Prepare a 3-5 page paper that demonstrates your understanding of the issues. Address the following questions in your final paper:
• What affect will foreign accounting standards have on your audit engagement from a resource, time and cost standpoint?
• How will foreign standards affect your audit plan and sampling techniques used to validate original transactions?
• How will you approach potential fraud issues in a global environment?
• How is the accounting profession changing in order to address the issue of inconsistent accounting standards?