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单击此处编辑母版标题样式,单击此处编辑母版文本样式,第二级,第三级,第四级,第五级,*,*,单击此处编辑母版标题样式,单击此处编辑母版文本样式,第二级,第三级,第四级,第五级,*,*,International Accountingand Multinational Enterprises,2024/9/20,1,International Auditing Issues,Chapter Twelve,2024/9/20,2,International Auditing Issues,Introduction,Auditors as both individuals and firms are going increasingly international due to increased globalization of business;,Financial advisors must be as multinational as their clients;,To accomplish this professional accountants have formed global organizations,1,2024/9/20,3,Introduction (Cont.),External auditors provide clients with global value added services, including:,Tax advice,Training,Financing Controls Review,Basic Accounting Services.,2,2024/9/20,4,The Accounting and Auditing Profession,Auditing as defined by:,Quantifiable and verifiable financial data of economic entities;,Established criteria;,A competent and independent person to test the correspondence between the data and the criteria.,This definition must be considered in light of differing domestic/international accounting/ auditing standards.,3,2024/9/20,5,The Accounting and Auditing Profession (Cont.),4,Auditor quality relates to a nations,:,View of the accounting profession,A nations educational system, and,Method of certification of auditors and accountant.,2024/9/20,6,Global Audit Services and the International Auditing Challenge,Services provided by global audit firms:,Audit services;,Tax advisory services;,Consulting/ Management services.,The global environment presents unique challenges for auditors:,Local business practices/customs;,Differences in currency, language, and law;,Distance and organizational issues;,Availability of suitable personnel.,5,2024/9/20,7,Local Business Practices and Customs,Can create challenges in confirming what has occurred:,Payment by cash rather than check is common in many countries making record-keeping difficult;,Confirming accounts receivable is difficult due to language differences, lack of customer experiences, mail problems, and privacy issues.,6,2024/9/20,8,Currency, Language and Law,Many countries have currency restrictions and transfer requirements;,Translation and transactional issues must be understood;,Ignorance of the local language can be a fatal handicap;,Knowledge of how home country laws interact with local laws is essential.,7,2024/9/20,9,Distance and Organization for Providing Audit Services,Organizing a global auditing firm to perform services is very difficult;,Distance is a major concern for multinational enterprises and can limit the scope of audit services;,Solutions to the distance problem include:,Travel to foreign clients,Physical or legal presence abroad.,8,2024/9/20,10,Availability of Suitable Personnel,9,Finding qualified personnel to staff foreign offices can be difficult;,The number of accountants available depends on the barriers to entering the profession, such as testing and educational/ certification requirements;,Global training and certification of accountants can vary considerably, three models exist:,Apprenticeship,University, and,Dual Track.,2024/9/20,11,Numerous national restrictions prevent the movement of accounting professionals between countries;,The General Agreement on Trade in Services (GATS) addresses reciprocity issues:,Signatories agree to administer licensing rules in a reasonable, objective and impartial manner,Countries are encouraged to recognize other countries qualifications,The US, Canada, and Australia have agreed to simplified standards for reciprocity.,10,Availability of Suitable Personnel (Cont.),2024/9/20,12,Strategies,:,Accounting firms “go global” to better service their clients and to protect their markets.,The five largest global public accounting firms are,:,Arthur Anderson,Deloitte-Touche,Ernst and Young,KPMG, and,Price-Waterhouse Coopers.,11,Global Accounting Firms,2024/9/20,13,Strategies,(cont.):,Since the 1980s, many global accounting firms have grown through mergers;,Global firms have also began organizing around industry.,12,Global Accounting Firms (Cont.),2024/9/20,14,Multinational firms are increasingly relying on global accounting firms to assist them in attracting international investors;,Investors want an objective assessment of firm financial statements.,Audit standards differ from country to country;,Audit standards come from the public sector, private sector, and a combination of the two:,Developed countries often rely on their private sectors to promulgate standards.,13,Audit Standards,2024/9/20,15,The EU Fourth and Eighth Directives,:,Fourth Directive requires audits for all companies within its purview,Eighth Directive deals with audit standards and qualifications.,14,Audit Standards (Cont.),2024/9/20,16,The International Federation of Accountants (IFAC) is attempting to harmonize audit standards and audit professions;,IFAC issues guidance in six key areas,:,Auditing,Education,Ethics,Financial Management Accounting,Information Technology, and,Public Sector Accounting.,15,International Harmonization of Audit Standards,2024/9/20,17,Would give users in other countries confidence in audit reports,Providing readers with assurance that audit standards are being followed;,Help readers make international financial comparisons;,Provide incentives to improve and extend international accounting standards;,Aid the flow of investment capital;,Help lesser-developed countries develop domestic audit standards;,Help lessen the effect of distance between management and users.,16,Benefits of Developing and Enforcing Internationally Accepted Auditing Standards,2024/9/20,18,The International Forum on Accountancy Development (IFAD) was formed to improve the quality of Global Accounting and Auditing.,17,Benefits of Developing and Enforcing Internationally Accepted Auditing Standards (Cont.),2024/9/20,19,
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