Understanding The Roles Of Finance And Accounting In Global Competitive Advantage

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Introduction
International Trade and Foreign Direct Investment
Culture and Business
World Economies
Global and Regional Economic Cooperation and Integration
International Monetary System
Foreign Exchange and the Global Capital Markets
International Expansion and Global Market Opportunity Assessment
Exporting,Importing,and Global Sourcing
Strategy and International Business
Global Entrepreneurship and Intrapreneurship
Winning Through Effective,global Talent Management
Harnessing the Engine of Global Innovation
Competing Effectively Through Global Marketing,Distribution,and Supply-Chain Management
Understanding the Roles of Finance and Accounting in Global Competitive Advantage

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Question 1

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True/False

The purpose of accounting is to communicate the organization's financial position to company managers,investors,banks,and the government.

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Question 2

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Investors and banks use financial statements to determine whether to invest in or loan capital to the firm.

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Question 3

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Governments use financial statements to ensure that the companies are paying their fair share of taxes.

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Question 4

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Most IASB statements provide three acceptable alternatives since it is difficult to get an agreement while formulating the international reporting standards.

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Question 5

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In countries where companies tend to rely more on banks for funding,accounting rules are framed such that assets are valued conservatively to protect a bank's investment.

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Question 6

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Adopting different accounting standards makes it easier for investors or lenders to compare the financial health of two companies.

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Question 7

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In the United States and Great Britain,companies tend to rely more on banks for funding than on individual investors.

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Question 8

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Some large Chinese companies report results in both Chinese accounting standards and the IASB's standards to facilitate the easy financial assessment of the companies by the investors.

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Question 9

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In countries like Switzerland,Germany,and Japan,accounting rules are designed to help individual investors.

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Question 10

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Some companies may gain greater efficiencies and stronger controls by making a move from the GAAP to the IFRS.

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Question 11

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An interim step toward the United States adopting IFRS would be to permit US firms that operate globally to file only under IFRS,rather than under both GAAP and IFRS,thereby reducing their financial-statement preparation costs.

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Question 12

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Adhering to GAAP as well as IFRS helps companies in creating globally shared service center for accounting,rather than having accounting departments in different regions.

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Question 13

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The consolidated financial statement must reconcile all the investment and capital accounts as well as the firms' assets,liabilities,and operating accounts.

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Question 14

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Premium pricing,bank fees,and interest payments are costs associated with the current-rate method of foreign-currency translation.

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Question 15

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Most of the developed nations require consolidated statements so that losses can't be hidden under an unconsolidated subsidiary.

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Question 16

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The current-rate method avoids the paper gains or losses problem of the temporal method.

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Question 17

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The disadvantage of raising capital in equity markets is that the firm has to repay the money at a specific time and at a specific interest rate.

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Question 18

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Consolidating financial statements of subsidiaries located in different countries poses problems because of the different currencies used in different countries.

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Question 19

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Some governments court foreign borrowers by offering low-interest loans or by offering lower corporate income tax to attract investment in their countries.

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Question 20

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Companies face currency risk because they typically price their products and services in the local currency of each country in which they operate.

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