2025/6/24InternationalAccounting

andMultinationalEnterprises上海金融學(xué)院會(huì)計(jì)財(cái)務(wù)管理系王純2025/6/24InternationalAuditingIssuesChapterTwelve2025/6/24InternationalAuditingIssues

IntroductionAuditorsasbothindividualsandfirmsaregoingincreasinglyinternationalduetoincreasedglobalizationofbusiness;Financialadvisorsmustbeasmultinationalastheirclients;Toaccomplishthisprofessionalaccountantshaveformedglobalorganizations,12025/6/24Introduction(Cont.)Externalauditorsprovideclientswithglobalvalueaddedservices,including:Taxadvice,Training,FinancingControlsReview,BasicAccountingServices.22025/6/24TheAccountingandAuditingProfessionAuditingasdefinedby:Quantifiableandverifiablefinancialdataofeconomicentities;Establishedcriteria;Acompetentandindependentpersontotestthecorrespondencebetweenthedataandthecriteria.Thisdefinitionmustbeconsideredinlightofdifferingdomestic/internationalaccounting/auditingstandards.32025/6/24TheAccountingand

AuditingProfession(Cont.)4Auditorqualityrelatestoanation’s:Viewoftheaccountingprofession,Anation’seducationalsystem,andMethodofcertificationofauditorsandaccountant.2025/6/24GlobalAuditServicesandtheInternationalAuditingChallengeServicesprovidedbyglobalauditfirms:Auditservices;Taxadvisoryservices;Consulting/Managementservices.Theglobalenvironmentpresentsuniquechallengesforauditors:Localbusinesspractices/customs;Differencesincurrency,language,andlaw;Distanceandorganizationalissues;Availabilityofsuitablepersonnel.52025/6/24LocalBusinessPracticesandCustomsCancreatechallengesinconfirmingwhathasoccurred:Paymentbycashratherthancheckiscommoninmanycountriesmakingrecord-keepingdifficult;Confirmingaccountsreceivableisdifficultduetolanguagedifferences,lackofcustomerexperiences,mailproblems,andprivacyissues.62025/6/24Currency,LanguageandLawManycountrieshavecurrencyrestrictionsandtransferrequirements;Translationandtransactionalissuesmustbeunderstood;Ignoranceofthelocallanguagecanbeafatalhandicap;Knowledgeofhowhomecountrylawsinteractwithlocallawsisessential.72025/6/24DistanceandOrganizationforProvidingAuditServicesOrganizingaglobalauditingfirmtoperformservicesisverydifficult;Distanceisamajorconcernformultinationalenterprisesandcanlimitthescopeofauditservices;Solutionstothedistanceprobleminclude:Traveltoforeignclients,Physicalorlegalpresenceabroad.82025/6/24AvailabilityofSuitablePersonnel9Findingqualifiedpersonneltostaffforeignofficescanbedifficult;Thenumberofaccountantsavailabledependsonthebarrierstoenteringtheprofession,suchastestingandeducational/certificationrequirements;Globaltrainingandcertificationofaccountantscanvaryconsiderably,threemodelsexist:Apprenticeship,University,andDualTrack.2025/6/24Numerousnationalrestrictionspreventthemovementofaccountingprofessionalsbetweencountries;TheGeneralAgreementonTradeinServices(GATS)addressesreciprocityissues:Signatoriesagreetoadministerlicensingrulesinareasonable,objectiveandimpartialmanner,Countriesareencouragedtorecognizeothercountries’qualifications,TheUS,Canada,andAustraliahaveagreedtosimplifiedstandardsforreciprocity.10AvailabilityofSuitablePersonnel(Cont.)2025/6/24Strategies:Accountingfirms“goglobal”tobetterservicetheirclientsandtoprotecttheirmarkets.Thefivelargestglobalpublicaccountingfirmsare:ArthurAnderson,Deloitte-Touche,ErnstandYoung,KPMG,andPrice-WaterhouseCoopers.11GlobalAccountingFirms2025/6/24Strategies(cont.):Sincethe1980’s,manyglobalaccountingfirmshavegrownthroughmergers;Globalfirmshavealsobeganorganizingaroundindustry.12GlobalAccountingFirms(Cont.)2025/6/24Multinationalfirmsareincreasinglyrelyingonglobalaccountingfirmstoassisttheminattractinginternationalinvestors;Investorswantanobjectiveassessmentoffirmfinancialstatements.Auditstandardsdifferfromcountrytocountry;Auditstandardscomefromthepublicsector,privatesector,andacombinationofthetwo:Developedcountriesoftenrelyontheirprivatesectorstopromulgatestandards.13AuditStandards2025/6/24TheEUFourthandEighthDirectives:FourthDirectiverequiresauditsforallcompanieswithinitspurview,EighthDirectivedealswithauditstandardsandqualifications.14AuditStandards(Cont.)2025/6/24TheInternationalFederationofAccountants(IFAC)isattemptingtoharmonizeauditstandardsandauditprofessions;IFACissuesguidanceinsixkeyareas:Auditing,Education,Ethics,FinancialManagementAccounting,InformationTechnology,andPublicSectorAccounting.15InternationalHarmonizationof

AuditStandards2025/6/24Wouldgiveusersinothercountriesconfidenceinauditreports,Providingreaderswithassurancethatauditstandardsarebeingfollowed;Helpreadersmakeinternationalfinancialcomparisons;Provideincentivestoimproveandextendinternationalaccountingstandards;Aidtheflowofinvestmentcapital;Helplesser-developedcountriesdevelopdomesticauditstandards;Helplessentheeffectofdistancebetweenmanagementandusers.16BenefitsofDevelopingandEnforcingInt