DEPARTMENT OF ACCOUNTING AND LEGAL STUDIES SCHOOL OF BUSINESS COLLEGE OF CHARLESTON

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1 DEPARTMENT OF ACCOUNTING AND LEGAL STUDIES SCHOOL OF BUSINESS COLLEGE OF CHARLESTON ACCT INTERNATIONAL ACCOUNTING SEMINAR SPRING 2014: MW 2:00-3:15 (Beatty Center 212) Instructor: Phone: Office: Hours: Timothy S. Doupnik doupnik@moore.sc.edu (803) (cell) TBD MW 1 :00-2:00 and by appointment Course description Textbook Learning objectives This course introduce students to the major accounting issues faced by companies engaged in international business. This course covers international issues related to financial reporting, taxation, transfer pricing, management accounting, and auditing, as well as issues involved in the analysis of foreign company financial statements and international trends in corporate social reporting. Doupnik and Perera, International Accounting Third Edition, ACCT 560 has four broad learning objectives: 1. To expose students to the diversity of accounting that exists internationally, and provide a context for understanding the important role that International Financial Reporting Standards (IFRS) play in the global economy. 2. To provide students with a deeper understanding of IFRS, from institutional, conceptual, and technical perspectives. 3. To enhance students' technical knowledge of financial reporting, management control, and taxation issues specifically relevant for multinational companies. 4. To provide students with a general exposure to the global dimensions of accounting. These learning objectives correspond to the Accountancy Graduate Program's learning goals related to Achieving a Broadened Perspective, Acquiring Specialized Technical Skills and Knowledge, and Understanding Global Dimensions within the accounting domain.

2 Class attendance Class attendance is mandatory. Any student who misses more than three classes may receive a failing grade and/or be administratively dropped from the class roll. In extreme cases exceptions to the absence policy may be made on an individual (case-by-case) basis. These exceptions will only be considered with appropriate documentation requested by the professor and a letter from the Dean of Students. Grading Course grades are based upon your performance on graded (homework) assignments, examinations, and class participation, weighted as follows: Graded assignments (8 total; variable weights) 3 Exams (3 total; weighted 20% each) 60% Class participation Letter grades are determined based on the following scale: % % % A B c % B % C+ Below 70% F Graded assignments Exams Eight (8) end-of-chapter exercises and cases are assigned to be turned in as part of the course grade. These graded assignments are highlighted in bold italics and designated as HW on the Assignment Schedule. Three (3) exams, including a third exam administered during the final exam period, will be administered in class. The content of these exams will reflect the topics covered in class and will primarily consist of essay questions and problems. Class participation You are expected to come prepared for each class session. Your contribution to class discussions, including providing solutions to both graded and non-graded daily assignments, is important to the success of this course. I will subjectively evaluate your classroom participation. Cheating, plagiarism Electronic devices and disruptive behavior Cheating or plagiarism in any form may result in a failing grade for the course. Each student must do his or her work independently. Please refer to the College of Charleston student code of conduct and other authoritative statements regarding academic integrity. The use of all PDA devices, such as computers, cell phones, and tablets, are expressly forbidden during class. Sleeping, chatting, and other disruptive behavior are also forbidden. Violation of this rule will result in grade penalties, up to one letter grade per infraction. 2

3 Disability policy College of Charleston Honor Code & Academic Integrity The College will make reasonable accommodations for persons with documented disabilities. Students should apply at the Center for Disability Services I SNAP, located on the first floor of the Lightsey Center, Suite 104. Students approved for accommodations are responsibility for notifying me as soon as possible and for contacting me one week before accommodation is needed. Lying, cheating, attempted cheating, and plagiarism are violations of our Honor Code that, when identified, are investigated. Each incident will be examined to determine the degree of deception involved. Incidents where the instructor determines the student's actions are related to a misunderstanding will be handled by the instructor. A written intervention designed to help prevent the student from repeating the error will be given to the student. The intervention, submitted by form and signed both by the instructor and the student, will be forwarded to the Dean of Students and placed in the student's file. Cases of suspected academic dishonesty will be reported directly by the instructor and/or others having knowledge of the incident to the Dean of Students. A student found responsible by the Honor Board for academic dishonesty will receive a XF in the course, indicating failure of the course due to academic dishonesty. This grade will appear on the student's transcript for two years after which the student may petition for the X to be expunged. The student may also be placed on disciplinary probation, suspended (temporary removal), or expelled (permanent removal) from the College by the Honor Board. Students should be aware that unauthorized collaboration-working together without permission-is a form of cheating. Unless the instructor specifies that students can work together on an assignment, quiz and/or test, no collaboration during the completion of the assignment is permitted. Other forms of cheating include possessing or using an unauthorized study aid (which could include accessing information via a cell phone or computer), copying from others' exams, fabricating data, and giving unauthorized assistance. Students can find the complete Honor Code and all related processes in the Student Handbook at Other policies Recording class lecture or discussion is not allowed. Therefore, cell phones, ipads, and similar devices must be powered off and put away before class. You should not walk in late for class. If unavoidable circumstances warrant you being late, please come in quietly and take a seat. Again, please familiarize yourself with the College's Student Code of Conduct as you are bound by those rules in this course. This includes being disruptive, being rude, sleeping, texting, talking during the lecture, or otherwise impeding the learning of others. I reserve the right to dismiss you from the course permanently if I deem your breech of the Code of Conduct severe. 3

4 ACCT 560 International Accounting Seminar Spring 2014 Assignment Schedule (subject to change) Week Monday Wednesday Jan8 Read Chapter 1 Introduction to International AccountinR January 13 January 15 Exercises 3, 4, 6 Read Chapter 2 Worldwide Accounting Case 1-1 Besserbrau AG Diversity Case 1-2 Vanguard International Growth Fund HW 1: Exercise 2 (General Motors and Tata (Parts 1, 2, 3) Motors) (turn in) (URLs for annual reports are located on page 6 of this syllabus) Exercise 6 January20 January 22 NO CLASS - MARTIN LUTHER KING JR. Chapter 2 HOLIDAY HW 2: Exercise 7 (turn in) Case 2-1 The Impact of Culture on Conservatism Case 2-2 SKD Limited January 27 January 29 Read Chapter 3 Int 'l Convergence of Financial Chapter 3 Reporting (focus on pages 71-76, 80-98, 100- Exercise ) Exercise 15 Questions February 3 February 5 Read Chapter 4 International Financial Chapter 4 Reporting Standards I, pp and 142- Exercises 18, 20, 26, "Borrowing Costs" HW 3: Exercise 29 (turn in) Exercises 1, 15, 16 February 10 February 12 First Exam Covers Chapters 1, 2, 3, 4 Read Chapter 5 International Financial Reporting Standards II, pp and Replacement for Post-employment Benefits (handout) Exercises February 17 February 19 Chapter 5 Read Chapter 6 Exercise 16 Question: "What is a distinguishing feature of Exercises (replacements) (handout) the accounting environment in China, HW 4: Exercise 19 (turn in) Germany, Japan, Mexico and the U.K.?" Questions 2, 6, 7, 9, 10, 16, 17, 19 Exercise 3, 7 February24 February26 Read Chapter 7 Foreign Currency Transactions, Chapter 8 Translation of F.C. Financial pp Statements, pp Question 3 Questions 1-8 Exercises 1, 2 Exercises 1-6 HW 5: Case 7-2 Porto{ino Company (turn in) 4

5 March 3 March 5 NO CLASS - SPRING BREAK NO CLASS - SPRING BREAK 9 March JO March 12 Read Chapter 9 Additional Financial Reporting Read Chapter 10 Analysis of Foreign Financial Issues, pp "Accounting for Changing Statements Prices" Questions 10, 14, 16 Questions 1-6 Exercises March 17 March 19 Chapter 10 Catchup and review for second exam Exercises 3, 4, 7, 8 Exercise 11 HW 6: Case 10-1 Swisscom AG (turn in) 11 March 24 March 26 Second Exam Covers Chapters 5, 7, 8, 9, 10 Read Chapter 11 International Taxation Exercises 18, March 31 April 2 Chapter 11 Read Chapter 12 International Transfer Exercises 20, 24, 25 Pricing HW 7: Case 11-1 U.S. International Exercises 14, 16, 17,20 Corporation (turn in) 15 April 7 April 9 Chapter 12 Read Chapter 13 Strategic Issues for Case 12-1 Litchfield Corporation Multinational Corporations HW 8: Case 12-2 Global Electronics Company Question 8, 12, 13 (turn in) 15 April 14 April 16 Chapter 13 Read Chapter 14 International Auditing, pp. Exercise "Internal Auditing" Case 13-1 Canyon Power Company revised 16 April 21 April 23 Read Chapter 15 International Corporate Social Wrap-up and Review Reportinf! Third Exam - administered according to final exam schedule 5

6 SUMMARY OF GRADED ITEMS HW 1: Chapter 2, Exercise 2 HW 2: Chapter 2, Exercise 7 HW 3: Chapter 4, Exercise 29 Exam 1. HW 4: Chapter 5, Exercise 19 HW 5: Chapter 7, Case 7-2 Portofino Company HW 6: Chapter 10, Case 10-1 Swisscom AG Exam2. HW 7: Chapter 11, Case 11-1 U.S. International Corporation HW 8: Chapter 12, Case 12-2 Global Electronics Company Date January 15 January 22 February 5 February 10 February 17 February 24 March 17 March 24 March 31 April 7 % Weight* 3% 3% 20% 3% 6% 20% Exam3. Class Participation Final Exam Schedule Entire Semester 20% * Each item will be graded on a I 00-point scale. The point value will be multiplied by the percentage weight indicated above, and the resulting products (point values x percentage weights) for each graded item will be summed to determine the overall course score. Chapter 2, Exercise 2 Domestic and Foreign Company Annual Reports General Motors PAN Y /Investors/Stockholder Information/PD Fs/ 2012 GM Annual Report.pdf Tata Motors Annual-Report pdf 6

7 OVERVIEW OF INTERNATIONAL ACCOUNTING TOPICS EVOLUTION OF A MULTINATIONAL ENTERPRISE Domestic Company - no international activities! International Transactions 1 Export Sale - account for sale and foreign currency receivable Import Purchase - account for purchase and foreign currency payable Foreign Direct Investment before investment is made Hedging (F.X. Risk Management) - account for foreign currency forward contracts and options Acquisition - foreign financial statement analysis Greenfield - multinational capital budgeting after investment is made Financial Reporting 1. Consolidated Financial Statements a. GAAP conversion ~ b. Foreign currency translation :+ 2. Geographic segment reporting Accounting Diversity Harmonization International Financial Reporting Standards Taxation 1. Host country taxation 2. Home country taxation of foreign operations International transfer pricing Evaluation of foreign operation performance International internal auditing! Global Capital Markets Companies - access foreign capital markets (e.g., cross-listing)---~ International investor - analysis of foreign financial statement~----~ 7