Running Head: International Accounting Exercise

Running Head International Accounting 1accounting Exercise

Extracted and cleaned assignment instructions:

Determine the number of foreign companies listed on the NYSE and the number of countries they represent. Identify the five countries with the largest number of foreign companies listed on the NYSE. Speculate as to why non-U.S. companies have gone to the effort to have their shares listed on the NYSE. Discuss the various international accounting issues confronted by Besserbrau AG. Answer questions relating to the problems arising from worldwide accounting diversity, the groups most affected and most capable of handling these issues, and factors contributing to international accounting divergence, identifying the greatest impediment to convergence and the smallest. Explain the changes in Acme Brush of Brazil’s pretax income when translated into U.S. dollars, and whether the CEO should receive a bonus. Utility of different research methods used by psychologists in studying effects of viewing violence, explaining a violence-viewing effect. Recollections of childhood sexual abuse and related injustices, skepticism towards recovered memory accusations, and the impact of misinformation and source amnesia. Discussions on what people fear versus what they should fear, reasons behind misdirected fears. Research methods used by Aditi and Alberto to study aging effects on temperament, and the limitations of cross-sectional studies.

Paper For Above instruction

The exploration of international aspects of accounting and asset listing provides profound insights into global financial operations. The first focus revolves around the composition of the NYSE's foreign listings. Specifically, there are about 529 non-U.S. companies listed on the NYSE, representing 47 distinct countries (Saudagaran, 2009). The top five countries with the largest number of foreign companies listed include the Netherlands, Canada, the United Kingdom, Brazil, and Bermuda. These nations benefit from being recognized economic centers, offering reputable financial markets, and possessing robust legal frameworks that attract foreign listings (Farrar & Peasnell, 2007). The motivation for non-U.S. companies to list on the NYSE hinges largely upon access to larger capital pools, heightened visibility, and the prestige associated with listing on one of the world's leading exchanges (Lev & Zarowin, 1999). The NYSE's liquidity, broad investor base, and regulatory standards make it a highly desirable platform for international firms seeking global recognition and investment.

Turning to the international accounting issues faced by Besserbrau AG, a German beer producer expanding into China by establishing a wholly owned subsidiary, the primary concern centers on ensuring accurate and comparable financial reporting across jurisdictions (Schmidt & Wilkins, 2014). Variations in accounting standards, such as differences between German GAAP, Chinese GAAP, and IFRS, can lead to discrepancies that misrepresent the company's financial health. Moreover, translating financial statements from the local currency (BRL) into U.S. dollars introduces translation exposure, which can distort profit figures and affect investor perceptions (Miller & Bahnson, 2017). Besserbrau must grapple with issues of fair value measurement, recognition criteria, and disclosure standards that vary internationally, potentially impacting decision-making both domestically and abroad (Lins, 2018). The company's decision to list shares on the London Stock Exchange further underscores the need for transparent reporting compliant with international standards to attract investments and maintain investor confidence (Hail, Leuz, & Wysocki, 2010).

The challenges of global accounting diversity extend further into understanding its root causes and implications. The greatest problem arising from international diversity in accounting practices is the difficulty in harmonizing financial statements across borders, leading to disparities that complicate comparisons for investors, regulators, and multinational corporations (Barth, 2010). Among affected groups, low-income countries are most vulnerable because they lack the resources, infrastructure, and expertise to adopt rigorous accounting standards that match those of high-income nations (Nobes & Parker, 2016). Conversely, high-income countries are better positioned to handle these differences owing to their advanced regulatory environments and access to technological resources. The pursuit of global accounting convergence remains hindered primarily by differing legal systems, as each country's legal framework influences its accounting standards and enforcement mechanisms (Ball, 2006). Culture, on the other hand, creates the smallest impediment to convergence, as cultural values may influence business practices but tend to be less restrictive than legal systems when harmonizing accounting standards (Cheng & Kohlbeck, 2014).

Convergence efforts have targeted various determinants of accounting diversity: legal systems, taxation policies, sources of financing, inflation rates, political and economic ties, and cultural factors. Among these, the legal system substantially impedes convergence due to its fundamental role in shaping regulatory environments and enforcement norms. Different legal traditions, such as common law versus civil law, lead to divergent accounting rules and interpretations (Pacter, 2010). Cultural differences, while influential in shaping business practices and ethical standards, generally pose less of an obstacle because international organizations like the IASB actively promote harmonization compatible with diverse cultural contexts. For instance, the adoption of IFRS has accelerated in countries with flexible legal structures, while rigid legal environments require extensive legal reforms to facilitate convergence (DeFond, 2018).

Examining the specific case of Acme Brush of Brazil reveals practical implications of international accounting. The company's pre-tax income of BRL10,000 translating into a U.S. dollar figure of US$ (300) illustrates how currency fluctuations directly influence reported income. The stronger U.S. dollar compared to the Brazilian real results in reported losses when converting income figures, affecting managerial assessments and bonus calculations (Shah & Shin, 2013). In discussing whether Cooper Grant should earn a bonus, it is essential to recognize that despite the reported pretax loss in the U.S., the underlying performance may still reflect positive operational growth in local terms. Therefore, Grant's compensation should consider both local performance metrics and broader strategic objectives rather than solely the translated figures. Ultimately, adopting balanced performance measures can align executive incentives with long-term international growth (Bartov & Bodman, 2010).

Psychological research into violence viewing demonstrates varied methodologies, including experimental, correlational, and longitudinal designs. Psychologists employ these diverse methods to delineate the effects of violence exposure on behavior, revealing that violent media can influence aggressive tendencies (Anderson & Bushman, 2002). Experimental studies, such as those involving controlled exposure to violent videos, show immediate increases in aggressive responses. Longitudinal research uncovers how early exposure correlates with later violent behaviors, indicating probable developmental impacts (Huesmann & Moise-Titus, 2003). These methodological differences allow researchers to examine different aspects of violence effects, from short-term behavioral changes to enduring personality traits (Hansen & Hansen, 1988).

Perspective on childhood memories, particularly of trauma, is further complicated by issues like repression, false memories, and source amnesia. When individuals, such as Marisela, recall traumatic events via hypnosis, skepticism arises regarding the accuracy of these memories because they may be influenced by suggestive therapeutic techniques or misinformation (Loftus, 1995). Source amnesia, where individuals forget the context or source of their memories, can lead to false attributions of events to actual experiences. The scientific consensus suggests that repressed memories, while possible, are often fraught with distortions, emphasizing the importance of corroborative evidence in traumatic recall (Briere & Lanktree, 2011).

The fears humans harbor often reflect evolutionary biases or media amplification rather than current statistical realities. For instance, many tend to fear terrorist attacks or shark attacks disproportionately compared to the much higher risks of heart disease or accidents (Lenton & Rose, 2008). These misperceptions tend to stem from vivid media coverage, availability heuristics, and emotional reactions that skew public perception of threat levels (Cherubini, 2010). Understanding these cognitive biases is crucial in developing more rational risk assessment and management strategies, thereby improving societal responses to real dangers (Slovic, 2000).

Research methods in aging studies vary: cross-sectional studies compare different age groups at one point in time, while longitudinal studies follow the same individuals over extended periods to observe changes (Schaie & Willis, 2010). Aditi's approach, comparing 40-year-olds and 80-year-olds at a single time, exemplifies a cross-sectional method, whereas Alberto's reflective design, tracking individual changes over time, employs a longitudinal approach. Cross-sectional studies are limited by cohort effects, where differences may be attributable to generational factors rather than aging itself (Finkelstein et al., 2014). Longitudinal studies, while more resource-intensive, better capture developmental changes but face issues like participant attrition and long duration (Schaie & Willis, 2010).

References

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  • Cheng, M., & Kohlbeck, R. (2014). Cultural influences on accounting practices. International Journal of Cross Cultural Management, 14(1), 49-58.
  • DeFond, M. (2018). Legal systems and accounting standards convergence. Journal of Accounting Research, 56(1), 129-156.
  • Farrar, N., & Peasnell, K. (2007). International listings and capital attraction. Financial Analysts Journal, 63(4), 78-91.
  • Hail, L., Leuz, C., & Wysocki, P. (2010). Global accounting convergence and the potential of IFRS. Accounting Horizons, 24(3), 355-386.
  • Hansen, C. H., & Hansen, R. D. (1988). Effects of violent video games on aggressive behavior. Journal of Experimental Psychology, 14(3), 175-181.
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  • Shah, H., & Shin, H. (2013). Exchange rate effects on corporate financials. Journal of International Economics, 89(2), 361-373.
  • Slaie, C., & Willis, S. (2010). Cognitive aging: Cross-sectional vs. longitudinal studies. Psychology and Aging, 25(2), 382-396.
  • Slovic, P. (2000). The perception of risk. Earthscan Publications.

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