Financial Reporting Essay

1444 Words6 Pages
Financial Reporting Generally accepted accounting principles (GAAP) are uniquely different for each country. Although there has been a push for International Financial Reporting Standards (IFRS) to be the new accounting standards for both domestic and foreign financial statements, local GAAP still remains the current standard for participating countries (CFO, 2008). Regulations regarding an organization’s regulatory environment and issues with foreign currency vary within domestic and foreign companies. The differences in GAAP also vary between the two. When U.S. companies do business overseas, they must also follow certain rules regulated by the Foreign Corrupt Practices Act (FCPA). According to CPE Inc. (2008), “Every company and…show more content…
According to the management’s report on internal control over financial reporting; “the management of UTC is responsible for establishing and maintaining adequate internal control over financial reporting” (UTC Financials, 2008). This internal control method is intended to impart reasonable assurance pertaining to the reliability of UTC financial reporting and preparation of financial statements in accordance with GAAP in the United States of America. The management at UTC uses criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in order to assess the effectiveness of UTC internal control over financial reporting. The COSO is an American private sector program that was formed to identify fraudulent factors associated with deceptive financial reporting, and to make recommendations to diminish these occurrences. UTC also employs the services annually of PricewaterhouseCoopers LLP as an independent registered accounting firm to audit the effectiveness of the internal controls over financial reporting. This independent accounting firm confirms that all financial information presented in UTC annual reports is submitted fairly and in conformity with GAAP in the United States of America. Because UTC operates in over 60 countries, the organization conducts business in many different currencies. As a result, the corporation is exposed and is subject to
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