Ethical Obligations and Decision-Making in Accounting 2nd Edition by Steven Mintz, Roselyn Morris

Exercise 20

Recent examples of foreign companies paying bribes to gain international business include:

(a)    Alstom, the French engineering giant, has been investigated by French and Swiss authorities that are looking into accusations that the company paid hundreds of millions of dollars in bribes to gain contracts in Asia and South America from 1995 to 2003, and

(b)    The investigation of two former executives of Siemens who were convicted of bribery in connection with an Italian gas-turbine contract.

Some countries have their own anti-bribery laws such as the Foreign Corrupt Practices Act in the U.S. Other countries including the UK have no such standards. On an international level, 37 of the developed countries have signed the 1997 antibribery convention of the Organization for Economic Cooperation and Development. Still, countries such as China and Russia are not members and have been reluctant to embrace anti-bribery regulations. Do you think there should be only one global standard to control bribery of foreign government officials and key facilitators? Why or why not?

Step 1 of 3

Income Statement:

The statement of revenue and expense is called an income statement. It provides external and internal users information about the profitability of the organization.

Balance sheet:

The statement of assets, liability, and equity is called a balance sheet. It prepared after the income statement. It provides external and internal users information about the financial position of the company.

Assets:

Assets are the resources (property) for which monetary value can be attached. It is presented in the balance sheet.

Assets are classified into two types:

1. Current assets

2. Noncurrent assets

Current assets:

Current assets are those assets that can easily convert into cash within a short period.

Example: Debtor, bill of exchange, cash.

Noncurrent assets:

Noncurrent assets are those which are not purchased for the purpose of sale. These are acquired for the long term. It is also classified into fixed assets and intangible assets.

Example: Land, Building, Investment.