Part A - Questions
Q1. What accounting issues arise for a company as a result of engaging in international trade (imports and exports)?
Q2. What financial reporting issues arise as a result of making a foreign direct investment?
Q3. What would be the advantages of having a single set of accounting standards used worldwide?
Q4. Astra Zeneca PLC, based in the United Kingdom, and Abbott Laboratories, based in the United States, are two of the largest pharmaceutical firms in the world. The following information was provided in each company's 2012 annual report.
|
Astra Zeneca 2012 Annual Report
|
|
(£ in millions)
|
Revenues
|
Noncurrent Assets
|
|
United Kingdom
|
£8,782
|
£2,743
|
|
Continental Europe
|
11,264
|
3,673
|
|
The Americas
|
15,822
|
25,767
|
|
Asia, Africa, Australasia
|
6,534
|
803
|
|
|
£42,402
|
£32,986
|
|
Abbott Laboratories 2012 Annual Report
|
|
($ in millions)
|
Net Sales to External Customer
|
Long-Term Assets
|
|
United Sates
|
$16,784
|
$15,244
|
|
Japan
|
2,441
|
1,169
|
|
Germany
|
1,740
|
6,173
|
|
The Netherlands
|
1,883
|
532
|
|
Italy
|
1,127
|
222
|
|
Canada
|
1,253
|
352
|
|
France
|
1,167
|
220
|
|
Spain
|
942
|
314
|
|
United Kingdom
|
1,049
|
1,345
|
|
India
|
933
|
3,467
|
|
All other Countries
|
10,555
|
6,874
|
|
Consolidated
|
$39,874
|
$35,912
|
Required: Calculate an index of multinationality based upon the geographical distribution of Sales and Assets (employee information is not available) to determine which of these two companies is more multinational.
Part B - Questions
Q1. What are the two major types of legal systems used in the world? How does the type of legal system affect accounting?
Q2. What are the major problems caused by worldwide accounting diversity for a multinational corporation?
Q3. What are the major problems caused by worldwide accounting diversity for international portfolio investment?
Q4. How are the Anglo and less developed Latin cultural areas expected to differ with respect to the accounting values of conservatism and secrecy?
Q5. According to Nobes, what are the two most important factors influencing differences in accounting systems across countries?
Q6. What are the different ways in which financial statements differ across countries?