School of Accounting and Finance

Sample Examination

ACC384 – International Accounting Issues

EXAM CONDITIONS: Open Book

WRITING TIME: 3 hours

+ 10 minutes reading time
+ 30 minutes technology allowance
TOTAL = 3 hours and 40 minutes

NUMBER OF QUESTIONS: Part A Essay: Answer two (2) of three (3)

questions. Worth 15 marks each.

Part B Short Answer: Answer four (4) of six

(6) questions. Worth 5 marks each.

VALUE: 50%

INSTRUCTIONS TO CANDIDATES:
This session your exam will be a time limited online test in Subject Interact 2
site. The test will still be timetabled by CSU Exams and you will receive
notification of the date and time of your exam in the usual way. The test will
open at the scheduled time and will close 3 hours 10 minutes later. We have
added a technology allowance to the time which means you will have an
additional 30 minutes in order to allow for any technology issues. A set of
sample questions will be made available in your i2 site.

DECLARATION:
By completing and submitting this exam, I declare that the answers are my own
work and I will not knowingly share the contents or my answers with any other
person before I or they have completed and submitted the exam.

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ACC384 2021XX Sample Exam
 Date last updated: 03/05/2021

Part A Essay Questions

Generally each response should take three (3) written pages or more of your
exam booklet to answer adequately.

Answer two (2) of three (3) questions. Each question is worth 15 marks.

Question 1
Topic 1 (Introduction to international accounting and accounting diversity)

What are the major problems caused by worldwide accounting diversity for a
multinational corporation? Discuss with relevant and explained examples.

Question 2
Topic 2 (Harmonisation/convergence of international accounting)

What is the role of the IASB (International Accounting Standards Board)?

How is the IASB’s Framework intended to assist firms in preparing IFRS
(International Financial Reporting Standards) based financial statements?

Question 3
Topic 5 (Translation of foreign currency financial statements)

Part A

Kangaroo Corporation (an Australian company) invests 1,000,000 marks in a foreign

subsidiary on 1 January, Year 1. The subsidiary commences operations on that date,
and generates net income of 200,000 marks during its first year of operations.
No dividends are sent to the parent this year. Relevant exchange rates between
Kangaroo Corporation’s reporting currency (A$) and the mark are as follows:

1 January, Year 1 . . . . . . . . . . . . . . . . . . A$0.15

Average, Year 1 .................. 0.17
31 December, 2020. . . . . . . . . . . . . . . . . . 0.21

Required:
Determine the amount of translation adjustment that Kangaroo Corporation will report
on its 31 December 2020, Year 1, balance sheet.

Part B

Discuss the major differences between IFRS (International Financial Reporting

Standards) and U.S. GAAP (United States Generally Accepted Accounting
Principles) in the translation of foreign currency financial statements?

ACC384 2021XX Sample Exam Page 2 of 4

 Date last updated: 03/05/2021

Part B Short Answer Questions

Generally each response should take one (1) written page or more of your
exam booklet to answer adequately.

Answer any four (4) of six (6) questions. Each question is worth 5 marks.

Question 1
Topic 3 (International Financial Reporting Standards)

How are internally generated intangibles handled under IFRS (International Financial
Reporting Standards)? How does this differ from U.S. GAAP (United States Generally
Accepted Accounting Principles)?

Question 2
Topic 4 (Foreign currency transactions)

True Blue Ltd is an Australian company for which the Australian dollar (A$) is the functional
currency. The company has entered into a foreign currency transaction during the year
ended 30 June 2020, selling goods on credit to a British company, London Sales Ltd, on
13 June 2020. The contract, denominated in pounds, amounts to £135,000. London Sales
Ltd pay for the goods on 7 July 2020.

Relevant exchange rates are as follows:

13 June 2020: A$1.00 = £0.5688

30 June 2020: A$1.00 = £0.5470
7 July 2020: A$1.00 = £0.5891

Required:
Prepare the journal entries to record the foreign currency transactions entered into by
True Blue Ltd with London Sales Ltd. Show all workings.

Question 3
Topic 5 (Translation of foreign currency financial statements)

What are the major procedural differences in applying the current rate and temporal
methods of translation?

Question 4
Topic 6 (International taxation and transfer pricing)

What is a tax haven? How might a company use a tax haven to reduce income
taxes?

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Question 5
Topic 7 (Management of multinationals)

Explain the role of accounting in implementing multinational business strategy.

Question 6
Topic 8 (International sustainability reporting)

What are the theories often used to explain the sustainability reporting practices of
firms?

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