Case 6-1.docx - Case 6-1 Mitra Jaan Prepared by Yuming Fu...

This preview shows page 1 - 5 out of 9 pages.

Case 6-1 Mitra Jaan Prepared by Yuming Fu Enrui Ma for Professor C. E. Reese in partial fulfillment of the requirements for ACC 508 International Accounting School of Business/Graduate Studies St. Thomas University Miami Gardens, Fla Term FL1/Fall, 2018 October 9 , 2018
Table of contents Issues ............................................................................................................. 2 Facts .................................................................................................................... 3 Analysis ................................................................................................................ 4 Conclusion. ...................................................................................................... 7 References ....................................................................................................... 8 1
Issues 1. Do you agree with Mr. Walker or Mr. Hara? 2a. What are the consequences to Mitra’s report income numbers of choosing the U.S. dollar or the Indian rupee as the currency of its Indian subsidiary? 2b. Do the auditors of Mitra Corporations have a role in the functional currency that the company choose? 3.Would auditor agree with Mr. Walker or Mr. Hara? 2
Facts Mirtra Corporation is headquartered in the U.S. and owned entirely by the U.S. investors. However, a large portion of Mirtra’s manufacturing operations is located in India .In this case, the company’s CEO thinks because all company’s shares are owned entirely by U.S. investors and also corporation office being here in the states. He thinks the company’s functional currency for the financial statement purpose should be U.S. dollar. However, company’s CFO think, company’s subsidiary primary operating environment in India and company have raw materials in India, to set out the price based on market conditions in India, and finance the operation from loans in Indian rupees obtained from local banks. The company should use Indian rupee.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture