ChoiSM_ch04 - Chapter 4 Comparative Accounting The Americas...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 4 Comparative Accounting: The Americas and Asia Discussion Questions 1. Public and private sector bodies are involved in regulating and enforcing financial reporting in the United States. The Financial Accounting Standards Board is a private sector body that determines U.S. generally accepted accounting principles. The Securities and Exchange Commission has the authority to determine U.S. GAAP for publicly held companies, but defers to the FASB. The FASB and SEC have a close working relationship that ensures that FASB standards are acceptable to the SEC. The SEC enforces financial reporting rules for publicly held companies. It actively reviews the filings that companies make. Auditors are the enforcers for non-publicly held companies. Accounting standards in Mexico are issued by the Council for Research and Development of Financial Information Standards (CINIF), an independent public-private sector body patterned after the U.S. FASB. Its authority for issuing Mexican accounting standards is recognized by the National Banking and Securities Commission, the government agency that regulates the Mexican Stock Exchange. The Commission is responsible for enforcing financial reporting standards for listed companies. However, it is unclear how proactive the Commission is in investigating filings that it receives. Enforcement of financial reporting for non-listed companies effectively rests with auditors. Japanese accounting standards are set by a private sector body, the Accounting Standards Board of Japan. The establishment of the ASBJ is a recent development in Japan. Before, accounting standard setting was a government activity. Enforcement of financial reporting effectively rests with auditors. The stock exchange is regulated by the Financial Services Agency, a government body. However, it is unclear how proactive the FSA is in monitoring financial reporting by Japanese companies. Accounting standard setting is a government activity in China. The China Accounting Standards Committee is the authoritative body within the Ministry of Finance responsible for developing accounting standards. The China Securities Regulatory Committee is the government agency that regulates China’s two stock exchanges. The CSRC is also responsible for enforcing financial reporting for listed companies. Many question the effectiveness of the Chinese enforcement mechanism. The Institute of Chartered Accountants in India, a private sector professional body, develops accounting standards in India. The Securities and Exchange Board of India, an agency of the Ministry of Finance, regulates India’s 22 stock exchanges and is responsible for enforcing financial reporting rules. However, it is unclear how proactive the board is in monitoring financial reporting by Indian companies.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern