Course : International Business

Effective Period : 2020

Global Accounting and

Financial Management
Chapter 19

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 Learning Objectives
19-1 Explain the crossroads of accounting and
finance
19-2 Identify the major factors affecting the
development of accounting objectives,
standards, and practices
19-3 Describe international accounting standards
and the process of global convergence
19-4 Demonstrate how companies account for
foreign-currency transactions
19-5 Determine how companies can translate foreign-currency
financial statements
19-6 List some of the key international finance functions
19-7 Show how companies protect against foreign- exchange
risk

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 Accounting and Finance
• Objective 19-1

• The role of the CFO

• Controller
• Global Financial Challenges

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 Influences on Accounting Standards

• Objective 19-2
Figure 19.1 Sources of Influence on Accounting Standards and Practices

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 Factors Affecting Accounting
• Objective 19-2
• Cultural Differences in Accounting
• Secrecy-Transparency/Optimism-Conservatism Matrix
Figure 19.2 A Disclosure/Assessment Matrix for National Accounting Systems

Source: Based on Lee H. Radebaugh, Sidney J. Gray, and Ervin L. Black, International Accounting and
Multinational Enterprises, 6th ed.(New York: John Wiley & Sons, 2002): 51.
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 Mutual Recognition and Reconciliation
• Objective 19-3

• Mutual Recognition
• Reconciliation
• Forces for Global Standards

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 International Accounting Standards
• Objective 19-3
• Drivers of the development of core standards globally

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 Accounting for Foreign Currency Transactions

• Objective 19-4
• Receivables and Payables
• FASB Reporting

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 Translating Financial Statements
• Objective 19-5
• Translation
• Consolidation
• Current Rate/Temporal Methods

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 Selecting a Translation Method

• Objective 19-5
Figure 19.3 Selecting a Translation Method

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 International Finance Functions
• Objective 19-6
• Capital Budgeting
• Internal Sources of Funds
• Global Cash Management

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 Risk Exposure
• Objective 19-7

• Types of Risk Exposure

• Strategies for Exposure Management

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 Daniels, John. 2019. International business :
environments and operations. Pearson. United
Kingdom p561-588

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