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    Principles Governing International Accounting in the USA

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    1. International accounting is impacted by a wide range of factors, including accounting diversity, global accounting standards, multinational companies, and the global economy.Think about the meaning of international accounting. As you do so, consider the variety of factors that impact it. Consider how accounting diversity can potentially create problems internationally, the implications of global (international) accounting standards, and how international accounting impacts multinational companies, as well as local and global economies. Also think about factors that you believe have the greatest and least impact on international accounting.
    With these thoughts in mind write an analysis of factors that have the greatest and least impact on international accounting.

    2. A substantial portion of the global economy can be attributed to international business and trade of imports and exports. In recent years, there has been tremendous growth with international business and trade, as well as growth in the number of companies involved with trade. The sheer scope of international business and trade of importers and exporters inevitably lends itself to accounting issues. Consider the impact of undervalued Chinese currency and the penalties Congress is considering imposing on Chinese trade on the company. Write a brief evaluation of the impact of one of the above current issues on companies. Provide your opinion of ways in which countries and lawmakers can resolve the current issue you selected.

    3. Users of financial statements depend on companies to report fair and accurate financial data. Accounting standards and principles not only support this fair and accurate reporting, but they also help create consistency that allows for reliable financial comparisons between different companies. In the United States, the Securities and Exchange Commission (SEC) requires publicly-traded companies to follow the U.S. Generally Accepted Accounting Principles (U.S. GAAP). Although these authoritative accounting principles are primarily established by the FASB, there are many boards and organizations that contribute to the standard setting process. These principles have a direct impact on the way data is organized and presented, which in turn can have an impact on how companies make decisions and operate. Consider the impact of the authoritative accounting principles that govern international accounting in the United States on Wal-Mart's financial statements.

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    Solution Preview

    The factors that have the greatest impact on development of accounting standards are the taxation system, the legal system, and business culture. The factors that have the least impact on the development of accounting standards are the political and economic association, inflation, level of economic development, and the sources of funding. The tax rules set standards in several countries because the company has to record revenue and expenses and claim these for the purpose of taxation. The legal system is also very important. In several countries the law includes provisions of accounting rules. These rules set accounting standards. The third factor that has a significant impact on accounting standards is the business culture. This is related in national culture that is shown to differ according to Hofstede's dimensions. Each of the other four factors namely political and economic association, inflation, level of economic development, and the sources of funding, have some impact on international accounting but their impact is relatively low.

    The low value of Chinese currency helps China export more. Weaker exchange rate increases the demand for Chinese exports. Chinese economy is dependent on exports and this fuels its growth. Low exchanges rates help sustain Chinese economic growth. The action that United States intends to take against China is to impose countervailing duties on products imported from China.

    Free trade agreements help the United States increase economic activities. For example, the North American Free Trade Agreement links several businesses in the United States to businesses in Canada and Mexico. It provides opportunities for businesses in small and medium sized businesses. Free trade agreements lead to better paying jobs, new markets, and increased savings and investment.

    The selected topic is however, reinstatement of tax breaks for repatriated earnings. Repatriated tax breaks mean that US multinational corporations get a onetime tax break on money earned in foreign counters. The background to the practice of tax breaks is that previously many companies did not repatriate earnings to the United States because ...

    Solution Summary

    The response provides you a structured explanation of authoritative accounting principles that govern international accounting in the United States in 1276 words with an especially detailed look at Wal-Mart. References included.