IAE Clermont Auvergne – School of Management
Masters 2 INTERNATIONAL ACCOUNTING 2023-2024 COURSE MATERIALS
by Mme. M. MATHOT
Instructor: Mme. M. MATHOT
M2CCA 2020-21 International Accounting Materials Mme. M. Mathot 1
,IAE Clermont Auvergne – School of Management
International Accounting Course Syllabus
I. Course Description:
International Financial Accounting focuses on the rules by which firms (and individuals) report the results of
their operations to outsiders such as stockholders, potential investors, creditors, suppliers and regulatory
agencies. Course objectives are to understand: 1) the important role accounting plays in allowing individuals to
make informed decisions 2) review the comprehensive accounting system including the construction of
financial statements such as balance sheets, income statements, and cash flow statements from the underlying
transactions.
II. Course Objective:
To aid in successful mastery of fundamental accounting principles.
III. Instructor: Mericia Mathot, Director, International Bachelor Program, UCA
Chartered Professional Accountant (CPA) Canada
Certified Fraud Examiner (CFE), USA
Certified General Accountant (CGA), Canada
Bachelor of Arts (Economics Major), University of Waterloo, Canada
IV. Program:
1. International Accounting Principles Overview:
1. Understand and apply the accounting concepts and principles.
2. Review the Differences in Accounting Systems Internationally
3. Evaluate business operations through the financial statements.
4. Construct Financial Statements and Analyze the Relationships among them
2. Measuring Business Income: The Adjustment Process
1. Analyze the Impact of Business Transactions on Accounts
2. Accrual versus Cash-Basis Accounting and Categories of Adjusting Entries.
3. Construct financial statements and evaluate a company’s debt-paying ability.
3. Stockholders’ Equity
The Corporate Structure, Paid-in Capital, Classes of Stocks
Understand Stock Issuance, treasury stock, Dividend Distribution
Evaluate a company’s performance using new ratios
Reporting of Stockholders’ equity transactions in the financial statements
4. Understanding and constructing the Cash Flows Statement:
1. Identify the purpose of the statement and distinguish among operating, investing, and
financing cash flows
2. Prepare the statement of cash flows by the indirect method
V. Assessment:
Midterm Exam 50%
Comprehensive Exam 50%
V. Bibliography
Miller-Nobles, Mattison, Matsumura, Horngren’s Accounting, 12th edition, Pearson 2018
Harrison, Horngren, Thomas,Tietz, Financial Accounting, 11th/12e, Prentice Hall, 2019
Choi, Meek, International Accounting, 7e, Prentice Hall, 2014
M2CCA 2020-21 International Accounting Materials Mme. M. Mathot 2
,IAE Clermont Auvergne – School of Management
1. Introduction to Accounting
Accounting plays a vital role in society. As a branch of economics, it provides information about a firm and its
transactions to facilitate resource allocation decision by users of that information. If the information reported is
reliable and useful, scarce resources are allocated in an optimal fashion, and conversely, resource allocations
are less than optimal when information is less reliable and useful. International accounting, the subject of this
text, is no different in its intended role. What makes its study distinctive is that the entity being reported on is
either a multinational company (MNC) with operations and transactions that cross national boundaries, or an
entity with reporting obligations to users who are located in a country other than that of the reporting entity.
An understanding of the international dimensions of the accounting processes is important to those engaged in
importing or exporting activities, as well as those seeking to manage a business, or obtain or supply financing
across national borders. Even a company operating solely within the confines of a single country is no
longer insulated from the international aspects of accounting as reliance on international vendors to contain
production costs and remain globally competitive is a common feature of contemporary business. Accounting
amounts may vary significantly according to the principles that govern them. Differences in culture, business
practices, political and regulatory structures, legal systems, currency values, local inflation rates, business risks,
Despite this international heritage, in most countries accounting remained a nationalistic affair, with national
standards and practices deeply anchored into national laws and professional regulations. There was little
understanding of parallel requirements in other countries. Yet, accounting increasingly served people and
organizations whose decisions were increasingly international in scope.
Domestic accounting: an information specialty providing information about a firm to users of that information
as a basis for economic decisions.
International accounting (defined): same as above except that the firm being reported on is a multinational
company with operations and transactions that cross-national boundaries or an entity with reporting obligations
to non-domestic readers. The paradox of international accounting is that in many countries, accounting
remains a nationalistic affair. Accounting serves people and institutions whose decisions are international in
scope. Accounting diversity creates a demand for harmonization.
A country’s accounting standards and practices reflect the influence of legal, cultural, political, and economic
factors. Because these factors vary by country, the underlying goals and philosophy of national accounting
systems also vary dramatically.
Growth and spread of multinational operations International business has traditionally been associated with
foreign trade. This activity, rooted in antiquity, continues unabated.
The rapid growth in global capital markets and cross-border investment activity means that the international
M2CCA 2020-21 International Accounting Materials Mme. M. Mathot 3
, IAE Clermont Auvergne – School of Management
dimensions of accounting are more important than ever for professionals who have to deal in one way or
another with these areas. Accounting plays a critical role in the efficient functioning of capital markets.
Lenders, investors, financial analysts, regulators, and stock exchanges require information about the financial
performance, position, and the future prospects of companies seeking financing. In turn, the needs of capital
market participants have strongly shaped the development of accounting practice. Demands of market
participants strongly influence companies’ accounting and disclosure choices and national and international
efforts to harmonize accounting measurement, disclosure, and auditing practices around the world.
How does, for example, a British or American investor make sense of Japanese accounts or Brazilian accounts
where measurement and transparency rules are very different from what they are typically accustomed to? Until
Japan and Brazil formally implement international financial reporting standards, should investors attempt to
as U.S. or IASB measurement rules prior to analysis? Or should they put themselves in the shoes of a Japanese
or Brazilian shareholder and conduct their analysis from a local perspective? On the other side of the coin, a
major factor motivating many corporations to raise monies abroad is to increase their access to funds and lower
their capital costs. The challenge here is trying to ensure that the foreign reader receives the same intended
message as the domestic reader. This challenge is significant in a world where firms compete for funds.
1. Sources of finance – who, how many, how close?
Equity markets
-Profits measure how well managers have run the company.
-Accounting is used to assess cash flows, risks, and to value the firm.
-Extensive disclosures.
Banks
-Conservative earnings for creditor protection.
-Less extensive disclosures.
What is Accounting? Accounting is the information system that measures business activity, processes the
data into reports, and communicates the results to decision makers. Accounting is “the language of business.”
Individuals, investors and creditors, regulatory bodies, and non-profit organizations are all identified as users of
accounting information. Internal and external users of accounting information exist.
Financial accounting provides information to those outside of the entity and must faithfully give an accurate
picture of the entity’s economic activities, while management accounting provides information to those within
the organization. Examples of management accounting information include budgets, forecasts, and projections
that are used in making strategic decisions of the entity.
1.1. ACCOUNTING PRINCIPLES, ASSUMPTIONS, AND CONCEPTS In the USA, the Securities and
Exchange Commission (SEC) was created in the early 1930s by the US Congress to oversee Accounting
regulation and enforcement
Securities and Exchange Commission Has jurisdiction over listed companies
-Relies on private sector (FASB) to set accounting standards
-Pressures FASB on the direction of accounting standards
Financial Accounting Standards Board
-Conceptual Framework is a significant feature of accounting standard setting
-Standard setting in the U.S. is both political and technical
-Generally accepted accounting principles (GAAP) are voluminous and detailed
-Committed to converging U.S. GAAP with IFRS
Sarbanes-Oxley Act (2002) has expanded requirements on corporate governance, disclosure and reporting,
and the regulation of the audit profession
-Established PCAOB
-Sets standards for auditors
-Oversees and inspects audit firms
-Sanctions auditors for defective work
-CEO and CFO must certify financial statements
M2CCA 2020-21 International Accounting Materials Mme. M. Mathot 4
Masters 2 INTERNATIONAL ACCOUNTING 2023-2024 COURSE MATERIALS
by Mme. M. MATHOT
Instructor: Mme. M. MATHOT
M2CCA 2020-21 International Accounting Materials Mme. M. Mathot 1
,IAE Clermont Auvergne – School of Management
International Accounting Course Syllabus
I. Course Description:
International Financial Accounting focuses on the rules by which firms (and individuals) report the results of
their operations to outsiders such as stockholders, potential investors, creditors, suppliers and regulatory
agencies. Course objectives are to understand: 1) the important role accounting plays in allowing individuals to
make informed decisions 2) review the comprehensive accounting system including the construction of
financial statements such as balance sheets, income statements, and cash flow statements from the underlying
transactions.
II. Course Objective:
To aid in successful mastery of fundamental accounting principles.
III. Instructor: Mericia Mathot, Director, International Bachelor Program, UCA
Chartered Professional Accountant (CPA) Canada
Certified Fraud Examiner (CFE), USA
Certified General Accountant (CGA), Canada
Bachelor of Arts (Economics Major), University of Waterloo, Canada
IV. Program:
1. International Accounting Principles Overview:
1. Understand and apply the accounting concepts and principles.
2. Review the Differences in Accounting Systems Internationally
3. Evaluate business operations through the financial statements.
4. Construct Financial Statements and Analyze the Relationships among them
2. Measuring Business Income: The Adjustment Process
1. Analyze the Impact of Business Transactions on Accounts
2. Accrual versus Cash-Basis Accounting and Categories of Adjusting Entries.
3. Construct financial statements and evaluate a company’s debt-paying ability.
3. Stockholders’ Equity
The Corporate Structure, Paid-in Capital, Classes of Stocks
Understand Stock Issuance, treasury stock, Dividend Distribution
Evaluate a company’s performance using new ratios
Reporting of Stockholders’ equity transactions in the financial statements
4. Understanding and constructing the Cash Flows Statement:
1. Identify the purpose of the statement and distinguish among operating, investing, and
financing cash flows
2. Prepare the statement of cash flows by the indirect method
V. Assessment:
Midterm Exam 50%
Comprehensive Exam 50%
V. Bibliography
Miller-Nobles, Mattison, Matsumura, Horngren’s Accounting, 12th edition, Pearson 2018
Harrison, Horngren, Thomas,Tietz, Financial Accounting, 11th/12e, Prentice Hall, 2019
Choi, Meek, International Accounting, 7e, Prentice Hall, 2014
M2CCA 2020-21 International Accounting Materials Mme. M. Mathot 2
,IAE Clermont Auvergne – School of Management
1. Introduction to Accounting
Accounting plays a vital role in society. As a branch of economics, it provides information about a firm and its
transactions to facilitate resource allocation decision by users of that information. If the information reported is
reliable and useful, scarce resources are allocated in an optimal fashion, and conversely, resource allocations
are less than optimal when information is less reliable and useful. International accounting, the subject of this
text, is no different in its intended role. What makes its study distinctive is that the entity being reported on is
either a multinational company (MNC) with operations and transactions that cross national boundaries, or an
entity with reporting obligations to users who are located in a country other than that of the reporting entity.
An understanding of the international dimensions of the accounting processes is important to those engaged in
importing or exporting activities, as well as those seeking to manage a business, or obtain or supply financing
across national borders. Even a company operating solely within the confines of a single country is no
longer insulated from the international aspects of accounting as reliance on international vendors to contain
production costs and remain globally competitive is a common feature of contemporary business. Accounting
amounts may vary significantly according to the principles that govern them. Differences in culture, business
practices, political and regulatory structures, legal systems, currency values, local inflation rates, business risks,
Despite this international heritage, in most countries accounting remained a nationalistic affair, with national
standards and practices deeply anchored into national laws and professional regulations. There was little
understanding of parallel requirements in other countries. Yet, accounting increasingly served people and
organizations whose decisions were increasingly international in scope.
Domestic accounting: an information specialty providing information about a firm to users of that information
as a basis for economic decisions.
International accounting (defined): same as above except that the firm being reported on is a multinational
company with operations and transactions that cross-national boundaries or an entity with reporting obligations
to non-domestic readers. The paradox of international accounting is that in many countries, accounting
remains a nationalistic affair. Accounting serves people and institutions whose decisions are international in
scope. Accounting diversity creates a demand for harmonization.
A country’s accounting standards and practices reflect the influence of legal, cultural, political, and economic
factors. Because these factors vary by country, the underlying goals and philosophy of national accounting
systems also vary dramatically.
Growth and spread of multinational operations International business has traditionally been associated with
foreign trade. This activity, rooted in antiquity, continues unabated.
The rapid growth in global capital markets and cross-border investment activity means that the international
M2CCA 2020-21 International Accounting Materials Mme. M. Mathot 3
, IAE Clermont Auvergne – School of Management
dimensions of accounting are more important than ever for professionals who have to deal in one way or
another with these areas. Accounting plays a critical role in the efficient functioning of capital markets.
Lenders, investors, financial analysts, regulators, and stock exchanges require information about the financial
performance, position, and the future prospects of companies seeking financing. In turn, the needs of capital
market participants have strongly shaped the development of accounting practice. Demands of market
participants strongly influence companies’ accounting and disclosure choices and national and international
efforts to harmonize accounting measurement, disclosure, and auditing practices around the world.
How does, for example, a British or American investor make sense of Japanese accounts or Brazilian accounts
where measurement and transparency rules are very different from what they are typically accustomed to? Until
Japan and Brazil formally implement international financial reporting standards, should investors attempt to
as U.S. or IASB measurement rules prior to analysis? Or should they put themselves in the shoes of a Japanese
or Brazilian shareholder and conduct their analysis from a local perspective? On the other side of the coin, a
major factor motivating many corporations to raise monies abroad is to increase their access to funds and lower
their capital costs. The challenge here is trying to ensure that the foreign reader receives the same intended
message as the domestic reader. This challenge is significant in a world where firms compete for funds.
1. Sources of finance – who, how many, how close?
Equity markets
-Profits measure how well managers have run the company.
-Accounting is used to assess cash flows, risks, and to value the firm.
-Extensive disclosures.
Banks
-Conservative earnings for creditor protection.
-Less extensive disclosures.
What is Accounting? Accounting is the information system that measures business activity, processes the
data into reports, and communicates the results to decision makers. Accounting is “the language of business.”
Individuals, investors and creditors, regulatory bodies, and non-profit organizations are all identified as users of
accounting information. Internal and external users of accounting information exist.
Financial accounting provides information to those outside of the entity and must faithfully give an accurate
picture of the entity’s economic activities, while management accounting provides information to those within
the organization. Examples of management accounting information include budgets, forecasts, and projections
that are used in making strategic decisions of the entity.
1.1. ACCOUNTING PRINCIPLES, ASSUMPTIONS, AND CONCEPTS In the USA, the Securities and
Exchange Commission (SEC) was created in the early 1930s by the US Congress to oversee Accounting
regulation and enforcement
Securities and Exchange Commission Has jurisdiction over listed companies
-Relies on private sector (FASB) to set accounting standards
-Pressures FASB on the direction of accounting standards
Financial Accounting Standards Board
-Conceptual Framework is a significant feature of accounting standard setting
-Standard setting in the U.S. is both political and technical
-Generally accepted accounting principles (GAAP) are voluminous and detailed
-Committed to converging U.S. GAAP with IFRS
Sarbanes-Oxley Act (2002) has expanded requirements on corporate governance, disclosure and reporting,
and the regulation of the audit profession
-Established PCAOB
-Sets standards for auditors
-Oversees and inspects audit firms
-Sanctions auditors for defective work
-CEO and CFO must certify financial statements
M2CCA 2020-21 International Accounting Materials Mme. M. Mathot 4
