International Accounting:Reporting and Disclosure

731 views

Published on

Never worry about accounting homework again, because our professionals are here! Our account service comes with a team of professionals who are more than ready to take on your assignment just log on to http://www.helpwithassignment.com/accounting-assignment-help

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
731
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
59
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

International Accounting:Reporting and Disclosure

  1. 1. International Accounting, 7/e Frederick D.S. Choi Gary K. Meek Chapter 5: Reporting and Disclosure www.HelpWithAssignment.com
  2. 2. Learning Objectives  Distinguish voluntary and mandatory disclosure and the applicable regulatory measures.  Identify the broad objectives for accounting disclosure systems in investor-oriented equity markets.  Discuss “triple-bottom line” reporting and why it is a growing tendency among large multinational corporations.  Have a basic understanding of the following selected corporate financial-disclosure practices: (a) disclosures of forward-looking information, (b) segment disclosures, (c) social responsibility reporting, (d) corporate governance disclosures, and (e) Internet business reporting and XBRL. www.HelpWithAssignment.com
  3. 3. Development of Disclosure  Voluntary disclosure  Voluntary disclosures are increasing as investors demand more detailed and timely information.  But managers’ incentives for disclosure aren’t always aligned with those of investors.  Disclosure regulations and third party certification can improve the functioning of capital markets. www.HelpWithAssignment.com
  4. 4. Development of Disclosure (contin) Regulatory disclosure requirements  Stock exchanges want to be sure that investors have enough information to evaluate a company’s performance and prospects.  Disclosure protects investors, but shareholder protection varies across countries.  Twin objectives of investor oriented markets (Frost and Lang 1996):  Investor protection  Investors are provided with material information.  And are protected through monitoring and enforcement.  Market quality  Markets are fair, orderly, and efficient.  And free from abuse and misconduct.  SEC financial reporting debate  Foreign registrants must furnish financial information substantially similar to that required of domestic companies.  Must reconcile net income and stockholders’ equity to U.S. GAAP if the registrant uses another GAAP besides US GAAP or IFRS.  Do SEC requirements deter foreign companies from listing their securities in the U.S.?  Or do the requirements protect investors and ensure the quality of U.S. capital markets?  Sarbanes-Oxley requirements are also believed to deter foreign companies from listing in the U.S. www.HelpWithAssignment.com
  5. 5. Reporting and Disclosure Practices  Forward-looking information  Includes  Forecasts of revenues, income, cash flows, capital expenditures  Prospective information about future economic performance or position  Statements of management’s plans and objectives for future operations  Softer information about future prospects is more common than precise forecasts.  Why?  Forecasts are inherently unreliable.  Legal repercussions if forecasts aren’t met. www.HelpWithAssignment.com
  6. 6. Reporting and Disclosure Practices (contin)  Segment disclosures  Disaggregated information about a firm’s industry and geographic operations and results  Includes disaggregated information on  Revenue  Income  Depreciation and amortization  Capital expenditures  Assets  Liabilities  Helps users understand how the parts make up the whole  Product lines and areas of the world vary in terms of risks, returns, and opportunities www.HelpWithAssignment.com
  7. 7. Reporting and Disclosure Practices (contin)  Social responsibility reporting  Reporting to “stakeholders”: employees, customers, suppliers, governments, activist groups, the general public, in addition to investors  The measurement and communication of information about a company’s effects on employee welfare, the local community, and the environment  A way to demonstrate corporate citizenship  “Sustainability” reports integrate economic, social, and environmental performance  “Triple-bottom line reporting”: profits, people, planet  Increasingly being audited to avoid the charge of “green- washing” www.HelpWithAssignment.com
  8. 8. Reporting and Disclosure Practices (contin)  Examples:  Employee reporting  Employment levels and personnel costs by division and region of the world  Management development  Compensation  Diversity  Human rights  Environmental reporting  Impact of production processes, products, and services on  Air  Water  Land  Biodiversity  Human health  Water, raw material, and energy consumption  Activities to reduce pollution  Spending on all of the above  Despite criticisms, becoming mainstream among multinational companies  Global Reporting Initiative has issued guidelines www.HelpWithAssignment.com
  9. 9. Reporting and Disclosure Practices (contin)  Corporate governance disclosures  Governance means the responsibilities, accountability, and relationships among shareholders, board members, and managers to meet corporate objectives.  Governance issues include:  Rights and treatment of shareholders  Responsibilities of the board  Disclosure and transparency  Role of stakeholders www.HelpWithAssignment.com
  10. 10. Reporting and Disclosure Practices (contin) www.HelpWithAssignment.com
  11. 11. Chapter Exhibits (contin)  Governance mechanisms and disclosures are improving around the world.  OECD issued its revised Principles of Corporate Governance in 2004.  Disclosure is a key element of any good system of corporate governance. www.HelpWithAssignment.com
  12. 12. Reporting and Disclosure Practices (contin)  Internet business reporting and XBRL  World Wide Web increasingly used as an information dissemination channel.  XBRL  Makes data interactive, allowing users to easily manipulate companies’ financial statement data.  Taxonomies have been developed for U.S. and German GAAP and for IFRS. www.HelpWithAssignment.com
  13. 13. Annual Report Disclosures in Emerging-Market Countries  Generally less extensive and less credible than disclosures of companies from developed countries.  Empirical evidence shows that earnings are less opaque in developed countries than in developing countries.  Monitoring and enforcement of disclosure requirements are also less extensive in developing countries. www.HelpWithAssignment.com
  14. 14. Implications for Financial Statement Users  Expect wide variation in disclosure levels and financial reporting practices.  The levels of mandatory and voluntary disclosure are increasing worldwide.  Managers of companies from low-disclosure countries should consider adopting enhanced disclosure.  Enhanced disclosures can result in competitive advantage over companies with restrictive disclosure policies. www.HelpWithAssignment.com
  15. 15. Chapter Exhibits www.HelpWithAssignment.com
  16. 16. Exhibit 5-1 (contin) www.HelpWithAssignment.com
  17. 17. Exhibit 5-1 (contin) www.HelpWithAssignment.com
  18. 18. Choi/Meek, 7/e Exhibit 5-1 (contin) www.HelpWithAssignment.com
  19. 19. Chapter Exhibits (contin) www.HelpWithAssignment.com
  20. 20. Exhibit 5-4 (contin) www.HelpWithAssignment.com
  21. 21. Exhibit 5-4 (contin) www.HelpWithAssignment.com
  22. 22. Chapter Exhibits (contin) www.HelpWithAssignment.com
  23. 23. Chapter Exhibits (contin) www.HelpWithAssignment.com
  24. 24. Chapter Exhibits (contin) www.HelpWithAssignment.com
  25. 25. Chapter Exhibits (contin) www.HelpWithAssignment.com
  26. 26. www.HelpWithAssignment.com For more details on Accounting Assignment Help visit our website at http://www.helpwithassignment.com/accounting-assignment-help www.HelpWithAssignment.com

×