代写 AYB227 Major Individual Project


Semester One, 2016

Background Information:
You are the investment manager for the Australian Super Fund (ASF). ASF currently holds $78 billion in net assets which ranks it 1 out of 193 funds that provided asset data. It also ranks 2nd of the 193 funds with 2.1 million fund members.
In order to reduce investment risk, the trustees of ASF would like to further expand the fund’s investment portfolio to include a major investment in the petroleum & crude oil production industry at a global level. This investment is to take place through the purchase of $50 million in shares in an existing, successful, petroleum refining company.


In order to fulfil this objective, the trustees, as a result of reading the 2015 Global Fortune 500 list of the world’s largest companies (http://fortune.com/global500/), have identified six globally listed companies within the petroleum refining industry. These companies are from a range of nations within three different regions of interest to the trustees as highlighted below:
(a)   Anglo Saxon countries (e.g. US, UK, Australia, Canada,   former Commonwealth member countries such as India,   Malaysia, Singapore etc. and the Nordic countries of   Denmark, Netherlands and Sweden)
(b)  the Germanic/Latin countries (e.g. France, Germany,   Italy, Poland, Czech Republic, Switzerland, Brazil, Chile,   Argentina and Mexico); and 
(c)  the Asian countries (e.g. China and Japan).


The trustees have narrowed their selection to the following companies:
(a)  Anglo Saxon group – BP (Britain) and BHP (Australia);  
(b)  Germanic/Latin group – Total (France) and Pemex (Mexico);
(c)  Asian group – China National Petroleum (China) and JX Holdings   (Japan).
Your task is to, firstly, select three listed companies only from the six choices provided by the trustees with one company from each of the different cultural groupings. That is, you must select one Anglo Saxon company, one Germanic/Latin company and one Asian company.
Second, you must then report back to the trustees as set out below -  which have been designed by the trustees to provide them with additional information on each of your three choices.
Note: Your answers must be a report of your findings to the directors and must include the  headings provided below and within the word limit set for this task.








PRE VERSUS POST-IFRS Investigation – What is the Purpose of the Project and What are the Key Requirements?
__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Example Company - Is SoftBank Corp. Ltd. Using IFRS? If The Answer is Yes – Can You Use SoftBank as a Company For Your Project? WHY/WHY NOT?

Is APPLE INC. Using IFRS? If The Answer is No – Can You Use it as a Company For Your Project? WHY NOT?
Is Vodafone Using IFRS? If the Answer is Yes, Can You Use Vodafone as a Company For Your Project? WHY/WHY NOT?




AYB227 Major Individual Project - Company Based Links to Annual Reports

 
http://fortune.com/global500/
 

BP (UK)


http://www.bp.com/content/dam/bp/pdf/investors/bp-annual-report-and-form-20f-2015.pdf



BHP (Australia)

http://www.bhpbilliton.com/~/media/bhp/documents/investors/annual-reports/2015/bhpbillitonannualreport2015.pdf?la=en




Total (France)

http://www.sec.gov/Archives/edgar/data/879764/000119312516506029/d83747d20f.htm


China National Petroleum (China)





http://www.cnpc.com.cn/en/xhtml/features/AnnualReport2014online/images/00-2014%20Annual%20Report.pdf



JX Holding (Japan)




http://www.hd.jx-group.co.jp/english/ir/library/annual/past_list.html#anc2014


Pemex (Mexico)



http://www.pemex.com/en/investors/publications/Paginas/annual-report.aspx

IFRS APPLICATION JURISDICTIONAL PROFILE:
 http://www.ifrs.org/use-around-the-world/pages/jurisdiction-profiles.aspx



Lecture Four Overview

Lecture Four Overview
Why is the US an Outlier?


Learning Objectives
1. To compare and contrast the concepts of harmonisation and convergence and to explain in your own words why the difference between these two terms is important to investors.
2. To explain in your own words the arguments for and against international harmonisation of accounting standards and defend your support of either position.
3. To explain in your own words the major national and international ‘forces’/groups that are supporting/promoting harmonisation efforts.


Learning Objectives





Initial - In Class Discussion - Why Do You Think the US Has Retained Its Own National Accounting Standards – Known As US GAAP?
Reading List – Lecture Four
Required Readings:  Note: These Readings are Also Relevant For Your Group Project and For the Final Exam - and Are Available in Files Directly Underneath this Lecture Three PPT File.
1)  Reading One: Text Book – Chapter Two

Referencing: In text
Doupnik and Perera (2015, p. 480)  OR (Doupnik & Perera, 2015, p.480)

Reference List
Doupnik, T.S. & Perera, H. (2015). International Accounting (4th ed.).  New York, NY: McGraw Hill

(cont’d)……………………………..
Reading List – Lecture Four
Required Readings:  Note: These Readings are Also Relevant For Your Group Project and For the Final Exam - and Are Available in Files Directly Underneath this Lecture Three PPT File.
2)  Reading Two  (pp. 4-12 Only): S. J. GRAY – ‘Towards a Theory of Cultural Influence on the Development of Accounting Systems Internationally’

Reference: Gray SJ 1988 'Towards a theory of cultural influence on the development of accounting systems internationally', Abacus, vol.24:1, pp. 1-15

(cont’d)……………………………..
Reading List – Lecture Four
Required Readings:  Note: These Readings are Also Relevant For Your Group Project and For the Final Exam - and Are Available in Files Directly Underneath this Lecture Three PPT File.

3)  Reading Three: Current  Update on Convergence of IFRS and U.S. GAAP
The Split Over Convergence
http://ww2.cfo.com/gaap-ifrs/2014/10/split-convergence/

FASB and the IASB back away from the goal of a single global accounting language. David M. Katz - October 17, 2014 | CFO Magazine – retrieved March 6, 2015.
Reference: (Your Turn to Reference this Reading Using Cite Write On Line) http://www.citewrite.qut.edu.au/cite/qutcite.jsp#apa

In Summary, the Key Themes from Lectures One and Two Are…..
A Key Issue That Arises from Lectures One and Two is….If The Adoption of IFRS Increases Transparency and Comparability and Lowers Compliance Costs etc. For Nations and Their Listed Companies…Why Hasn’t the US Moved?
Remember These PRE-IFRS Key Development Factors- They Are the Primary Reason for Accounting, Auditing, Taxation and Corporate Governance  Diversity!!! So…Is the Reason the US Has Not Moved to IFRS Culturally Based?
Development/Environmental Factors Influencing Accounting Practices
Accounting Clusters and Classifications

代写 AYB227 Major Individual Project


The Influence of Culture on Accounting - Hofstede’s Cultural Dimensions
Cultural Classification Model - Hofstede –
4 Original Underlying societal dimensions
Countries grouped into culture areas
Hofstede and Bond – 5th dimension
Using Hofstede’s Cultural Dimensions and Based on The Key Development Factors, Stephen Gray Developed a Model Looking Specifically at the Cultural Impacts on International Accounting Systems – BUT IS THIS MODEL STILL Relevant IN 2016?

Gray’s Accounting Values

Professionalism vs. Statutory Control
Uniformity vs. Flexibility
Conservatism vs. Optimism
Secrecy vs. Transparency

Professionalism vs. Statutory Control

Professionalism is reflected by individual professional judgment and self-regulation of the profession.

Statutory control focuses on legal compliance and legislative control of the profession.

The former is more indicative of the U.K. and U.S. and the latter more so with continental Europe.


Uniformity vs. Flexibility

Uniformity indicates preference for standardized accounting methods.

Flexibility is reflected in the varying of accounting practices for differences between companies.

U.K. and U.S. approaches are examples of flexibility.

Conservatism vs. Optimism

Conservatism indicates preference for caution and prudence.

Optimism tends more toward fair presentation.

Germany has traditionally reflected a strong tendency toward conservatism.


Secrecy vs. Transparency

Secrecy reflects a preference for minimal information disclosure.

Transparency reflects openness and full disclosure.

Countries with predominantly family-owned and bank-financed firms tend toward secrecy.

Cultural Impacts on Accounting – Have These Changed Since the Introduction of Global Accounting Standards? - Authority and Enforcement
Cultural Impacts on Accounting – Have These Changed Since the Introduction of Global Accounting Standards? Measurement and Disclosure
Hofstede Dimensions for Anglo-Saxon Countries + Gray’s Accounting Values versus IFRS Favourable Dimensions/Values







A Survey of International Convergence - Advantages of International Convergence – That is, ALL Nations Adopt the Same International Global Accounting Standards for Their Listed Companies

The Case for Global Accounting Standards: Arguments and Evidence  -  2012 - http://www.ifrs.org/Use-around-the-world/Documents/Case-for-Global-Accounting-Standards-Arguments-and-Evidence.pdf  - Ann Tarca - Professor of Accounting, University of Western Australia.  Academic Fellow - Research, IFRS Foundation

The expected benefits of global accounting standards are compelling.

The use of one set of high quality standards by companies throughout the world has the potential to improve the comparability and transparency of financial information and reduce financial statement preparation costs.

When the standards are applied rigorously and consistently, capital market participants will have higher quality information and can make better decisions.
The Case for Global Accounting Standards: Arguments and Evidence  -  2012
Thus markets allocate funds more efficiently and firms can achieve a lower cost of capital.

These arguments have been used to support the adoption of International Financial Reporting Standards (IFRS) for financial reporting for consolidated listed entities in European Union (EU) member states (EC1606/2002).

Other jurisdictions have cited similar reasons for adoption of IFRS (see Brown, 2011), reflecting the demand for high quality standards that can improve the quality and comparability of financial reporting and promote the development of national capital markets and the integration of markets internationally.
 Can Investment Markets Receive High Quality, Comparable, Corporate, Financial Information WITHOUT the Global Adoption of IFRS?
A Survey of International Convergence

Criticisms of international standards
Solution is too simple for such a complex problem.
Strips accounting of its flexibility to adapt to different situations.
Challenges national sovereignty.
Fair presentation is being sacrificed for comparability.
A tactic of large accounting firms to expand their market share.
Not suitable for small and medium-sized companies.
Standardisation, Harmonisation, and Convergence – Why Does it Matter To Investors?
Standardisation
Rigid, narrow set of rules
One-size-fits-all approach
Less flexible than harmonization or convergence
Not the current thinking

Harmonisation
Standards that are compatible – no logical conflicts
Means the elimination of differences among existing accounting standards
Standardisation, Harmonisation, and Convergence
Convergence

 Means the gradual elimination of differences in accounting standards
 But might also involve a new accounting treatment not in any current standard
 Involves cooperative efforts of IASB and national standard-setters
 Now the preferred term over harmonization
IASB – International Accounting Standards Board
European Union
Overview
 Company law harmonisation designed to integrate European financial markets – WHY?
 European Commission has full enforcement powers for accounting directives
European Union
The EU’s new approach and the integration of European financial markets
Requirement that EU companies listed on regulated markets prepare consolidated financial statements using IFRS

To become legally binding, IFRS needed to be adopted by the European Commission
European Financial Reporting Advisory Group (EFRAG)
Provides technical review and opinion of the IFRS
Standards Advice Review Group
Assesses whether EFRAG’s advice is well balanced and objective
Accounting Regulatory Committee
Recommends that the IFRS be adopted (or not)
European Commission
Adoption and completes the process
International Organization of Securities Commissions (IOSCO)

Securities regulators from over 100 countries
Responsible for over 90 percent of global securities markets
Objectives of member agencies
To cooperate together to promote high standards of regulation in order to maintain just, efficient, and sound markets
To exchange information on their respective experiences in order to promote the development of domestic markets
To unite their efforts to establish standards and an effective surveillance of international securities transactions
To provide mutual assistance to promote the integrity of the markets by a rigorous application of the standards and by effective enforcement against offenses
International Organization of Securities Commissions (IOSCO)

Extensive work on international accounting and disclosure standards

Cooperates with IASB

Has endorsed IFRS for cross-border securities offerings
International Federation of Accountants
Worldwide organization representing the accountancy profession
157 member organizations
123 countries
2.5 million accountants

           http://www.ifac.org/
Mission 
To strengthen the accountancy profession worldwide
To contribute to the development of strong international economies by establishing and promoting adherence to high-quality professional standards, furthering the international convergence of such standards
To speak out on public interest issues where the profession’s expertise is most relevant
International Federation of Accountants

Aim is to harmonise and converge BOTH accounting AND auditing standards and professional practice worldwide

Auditing adds credibility to external financial reports
High-quality auditing standards are necessary to ensure that accounting standards are rigorously interpreted and applied
If auditor training and audit standards vary, the reliability of financial statements will also vary
Organization for Economic Cooperation and Development (OECD) - http://www.oecd.org/
International organization of 30 (mostly industrialized) market-economy countries
Promotes good governance in public and private sectors
A voice for larger, industrialized countries
Standardisation, Harmonisation, and Convergence - Japan

Japan opts for IFRS - almost

07 October 2013 Japan has accounting standards to spare. Indeed, even as other countries simplify their financial reporting, Japan’s internal debate over standards has led to the proliferation of accounting options.
Standardisation, Harmonisation, and Convergence - Japan
Japan opts for IFRS - almost
Businesses already use Japanese GAAP (JGAAP) and can also voluntarily plumb for either US standards or what may be called pure International Financial Reporting Standards (IFRS), as issued by the international standard setter.
But with debate raging over the use of full IFRS Japanese companies will shortly be presented with yet another set of standards to opt for - a kind of IFRS light, or, as locals have dubbed it, J-IFRS -
Standardisation, Harmonisation, and Convergence - Japan
One external observer described the decision to economia as “a messy compromise”. But the decision speaks volumes about the sensitivity surrounding international standards and the intensity of feeling around the business issues they raise.

And even though the decision appears to increase the complexity for Japanese accounting, many see the sense in expanding the field of systems to choose from. - See more at: http://economia.icaew.com/business/october-2013/japan-opts-for-ifrs-almost#sthash.JdkGHNnq.dpuf

Political Lobbying
SO…Why Hasn’t the US Moved to IFRS and Why Are the US Standard-Setters Trying to Change The Meaning of Words Such as ‘Convergence’? One Explanation is the Political Lobbying of Standards by the US Corporate Sector – Why Does it Exist?

Q1: (a) Using Readings One and Two and the analytical models of Hofstede and Gray (Lectures Two and Three) explain how international differences in the Ownership and Financing of Companies could lead to differences in the financial reporting practices of global multi-national corporations (MNCs).

To fully illustrate your answer, select two countries from different cultural groupings (e.g. select one country with high individualism scores and one country with high collectivism scores using the Hofstede model) and compare and contrast their key development factors, cultural factors (Hofstede) and their accounting values (Gray).

代写 AYB227 Major Individual Project