research_project.A883 - International Accounting Accounting...

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International Accounting Accounting 883 Spring 2007 Research Project PURPOSE: The purpose of this project is to give you an opportunity to apply what you have learned from the course, in particular, the material on international financial statement analysis (Chapter 9). Your goal will be to arrive at an informed investment opinion concerning the publicly traded stock of a firm domiciled in a country other than the USA and Canada. In developing your opinion, you will evaluate the reporting practices, business opportunities (especially considering the country context), earnings potential and investment risk of the firm you select and/or are assigned. METHOD: 1. Your first task is to select two firms, with publicly traded stock. The firm you select should meet a number of criteria, including the following: a. One of the firms should be domiciled overseas. The firm should be listed in, and report in the GAAP of, the country in which it is domiciled. Its OK, however if the firm should also provides a reconciliation to US GAAP. b. The company can also report using International Financial Reporting Standards, but the accounting should be sufficiently different from US GAAP to make the case interesting. This criterion also applies to (a) with respect to non-US GAAP applied to a given firm. c. The other company should be domiciled in the USA and report in US GAAP. It should be a good match, i.e., be in the same industry and it should produce similar products and services. d. The country in which the company is domiciled should use a GAAP that is distinctive from US GAAP in ways that are material to a comparative analysis of your firm. e. Both companies should be in a limited number of businesses-preferably just 1 or 2. f. Both companies should be a fairly large, preferably with sales in excess of 2 billion per year. They should not, however, be too large (ex: a conglomerate like GE involved in many industries with sales > 80 billion/yr). “Too small” and “too large” tend to make the research task onerous. g.
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research_project.A883 - International Accounting Accounting...

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