This posting addresses financial statement questions.

Which of the following statements is not true concerning reasons for analyzing foreign financial statements?

A) It is important to determine the financial stability of foreign suppliers.
B) The stock returns of foreign corporations are nearly perfectly correlated with returns on U.S. stocks.
C) In a global economy, managers may use foreign competitors as benchmarks for evaluating performance.
D) Managers should determine the financial health of foreign customers before extending credit.

Which of the following is true about financial statement disclosure?

A) When account balances are aggregated, the analyst has the greatest amount of information.
B) The amount of financial statement disclosure varies widely from one country to another.
C) The concept of full disclosure has been universally adopted around the world.
D) An analyst can always disaggregate financial statement disclosures to obtain needed information.

According to European Union directives, how frequently must its publicly traded corporations publish financial reports?

A) annually
B) semi-annually
C) quarterly
D) monthly

On what SEC form must foreign corporations with shares listed on U.S. stock exchanges present a reconciliation of net income and stockholders' equity to U.S. GAAP?

A) Form 20-F
B) Form 10-K
C) Form 8-Y
D) Form 8-Q

Why is it believed that Japanese companies prefer the payback period over the discounted cash flow methods for evaluating capital investment alternatives?

A) It is consistent with their corporate strategy of investing in new technology.
B) Japanese companies compete using very short product life cycles.
C) Cash flows over a long period of time are difficult to predict with much accuracy.
D) All of the above

In designing an effective management control system for a multinational corporation, the accountant should measure factors appropriate for each unit's level of responsibility. Which of the following measures would be appropriate for evaluating the performance of a cost center?

A) return on investment
B) EBIT
C) output volume
D) residual income

What measures may be used in the performance evaluation system of a multinational corporation?

A) financial measures such as profit, cost, and return on investment
B) quality and customer satisfaction
C) market share
D) all of the above

According to OECD guidelines, what group is ultimately responsible for governing a multinational organization?

A) regulatory agencies in the host country
B) management
C) board of directors
D) common shareholders

In multinational corporations, to whom are the external auditors responsible according to OECD guidelines?

A) corporate management
B) creditors
C) government of the host country
D) stockholders

Why is litigation against external auditors, which is very common in the United States, virtually unknown in Japan?

A) Japanese auditors rarely make mistakes in their professional work.
B) Such litigation is inconsistent with Japanese values of interpersonal harmony.
C) Japan lacks a sophisticated court system for handling complex cases involving accounting matters.
D) External auditors are not responsible for the quality of work performed for a corporate client.