QUESTION: Lowly Coffee, Ltd. (a Vietnamese company) is a client of AJJ. Lowly is involved in the coffee industry in Vietnam, both in the production of coffee, and in the ownership of coffee shops around the country.  At present, Lowly is listed on the Ho Chi Minh Stock Exchange (HOSE) and AJJ has been providing both audit and non-audit services to Lowly for the past seven years.

Lowly is currently seeking international expansion opportunities for its coffee retail stores. The company has already completed extensive marketing research seeking new opportunities for the international expansion of its coffee shop operations.  As a result of this research the company has identified that the United States of America (USA) would potentially be a suitable site for the formation of a publicly listed subsidiary.

Lowly has not made a final determination as to whether this expansion project will go ahead and as part of its research it has sought the services of AJJ.  It has asked AJJ to provide reports outlining the financial reporting and disclosure issues that might arise if they decided to list their subsidiary on the New York Stock Exchange (NYSE).

Your supervisor, Ms.Nga has provided you with detailed requirements for an individual report that is to be produced by you in section requirements below.  The report requirements have been tailored by Ms.Nga to meet the perceived needs of Lowly, Ltd. and the scope of your report should be limited to the issues outlined below.

Requirements -

You need to locate a US, publically listed company, on the New York Stock Exchange, which operates in a similar environment to Lowly Coffee, Ltd. (i.e. in the coffee retail business).  You also need to find the reports produced by this company for its stakeholders (this would generally include the annual report and other reports such as sustainability reports).  These reports are normally available on the companies' websites

1. Drawing upon your identified company, its annual report, and other reports, you are required to present a written report to Lowly Coffee, Ltd. outlining your findings regarding the following issues:

A description of the financial reporting environment in the USA:

a. Briefly talk about the history of US financial reporting requirements

b. What are current financial reporting requirements for publically listed companies in the USA? Your report should describe changes in American reporting requirements since 2000, and any likely future changes in reporting requirements.

c. What are the cultural influences on financial reporting in America?

d. Identify the political processes that are influencing the setting of accounting standards in America.