Sarah Litchfield, chief executive officer and majority shareholder

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Provide a detailed history of the convergence project between US GAAP and IFRS.

Discuss in detail the major differences between US GAAP and IFRS applications.

Provide a list of countries that have adopted IFRS and how cultural differences can impact interpretation of IFRS.

Part II

Explain Transfer Pricing in detail.

Provide a detailed example of how Transfer Pricing can be used successfully by Multinational Corporations.

Please discuss in detail various methods of translating foreign currency financial statements.

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Please read through the following case study from the course text.  Then complete the assignment outlined at the close of the study.

Case Study 12-1: Litchfield Corporation is a U.S.-based manufacturer of fashion accessories that produces umbrellas in its plant in Roanoke, Virginia, and sells directly to retailers in the United States. As chief financial officer, you are responsible for all of the company’s finance, accounting, and tax-related issues.

Sarah Litchfield, chief executive officer and majority shareholder, has informed you of her plan to begin exporting to the United Kingdom, where she believes there is a substantial market for Litchfield umbrellas. Rather than selling directly to British umbrella retailers, she plans to establish a wholly owned UK sales subsidiary that would purchase umbrellas from its U.S. parent and then distribute them in the United Kingdom. Yesterday, you received the following memo from Sarah Litchfield:

Memorandum

SUBJECT: Export Sales Prices

It has come to my attention that the corporate income tax rate in Great Britain is only 28 percent, as compared tothe 35 percent rate we pay here in the United States. Since our average production cost is $15.00 per unit and the price we expect to sell to UK retailers is $25.00 per unit, why don’t we plan to sell to our UK subsidiary at $15.00 per unit? That way we make no profit here in the United States and $10.00 of profit in the United Kingdom, where we pay a lower tax rate. We have plans to invest in a factory in Scotland in the next few years anyway, so we cankeep the profit we earn over there for that purpose. What do you think?

Draft a 1-2 page essay responding to Sarah Litchfield’s question by explaining U.S. income tax regulations related to the export sales described in her memo. Include a discussion of any significant risks associated with her proposal. Make a recommendation with respect to how the price for these sales might be determined.  Ensure your essay is well-written and formatted in conformity with APA style.

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The Portfolio Project for ACT450 is a research report that identifies and analyzes a company that has been indicted for fraud. The report also will evaluate the auditor’s role in relation to the fraud.

To conduct your research, choose as a case study one of the companies listed below, or obtain approval from your instructor to use a public company not on the list.

Just for FEET, Inc.

Health Management, Inc.

Jamaica Water Properties

The Leslie Fay Companies

NextCard, Inc.

Crazy Eddie

ZZZZ Best

Your report must describe the issues surrounding the company and any company policies in relationship to the impact those might have on public audits/accounting.

Provide the following elements in your paper:

An executive summary identifying the company, the fraud, the affected stakeholders, and the ultimate resolution

A brief history of the company

An analysis of the auditor’s role in the fraud, including any auditing standards that the auditors did not follow

Identification of internal controls that were circumvented or lacking and that could have prevented the fraud

Identification of accounting policies currently in effect that are designed to prevent similar problems from occurring again, or, if no policy exists, a proposal of a solution that would prevent a recurrence

Your paper should be 8-10 pages in length. Follow APA format