Regulation of Accounting

Nottingham University Business School

MSc Programmes

[N14B28—International Accounting]

Comparison of Accounting Standards in UK and Japan: The Case of BAE Company and Fujitsu Company

GROUP MEMBERS:

[Qianni Ouyang]; ID: [4118036]

[Anqi Shao]; ID: [4121763]

[Gurpreet Singh Sethi]; ID: [4148275]

[Xinfang Zhang]; ID: [4147673]

COPY [2]

I. Introduction

With rapid development of globalization, a great deal of attention is paid to accounting diversity in different countries. However, for managers and investors in the globally economic market , it is significant for them to understand the underlying factors influencing accounting reporting and disclosure practices, the framework of accounting regulation in different countries and how to analysis financial report under different accounting standards more effectively. In this essay, financial reports from two multinational companies—BAE Company in UK and Fujitsu Company in Japan are compared and contrasted to examine how different accounting standards affect the information in annual report. Our group members are trying to make analysis from 4 aspects. The first part is from the macro—aspect which are the factors influencing accounting reporting and the regulatory framework in the UK and Japan. The second and the third parts are focused on comparing assets valuation principles and foreign currency translation which specifically explained by BAE and Fujitsu’s financial reports. Lastly, from the point of view of investors, we point out some problems they may meet when they compare financial reports under different accounting systems.

II. Major Factors and Regulatory Framework

Given the environmental factors (economic, behaviour, cultural etc.) differing from country to country, regulatory framework is expected to be diverse.

2.1 Major Factors Influencing Accounting Reports

Accounting is a product of social-economic development, which is affected by the objective environment prominently....