Usefulness of SFAS no. 52 in controlling and evaluating overseas operations: An empirical analysis |
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| Authors: | Orapin Duangploy Dahli Gray |
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| Institution: | 1. Professor of Accounting , University of Houston-Downtown.;2. Associate Professor of Accounting , American University. |
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| Abstract: | This study investigates whether managers of multinational enterprises prefer financial statements prepared under the current-rate or temporal method of translating foreign-currency-based financial statements into U.S.-dollar financial statements. The article also reports on the managers’ preferences for various indicators (for example, profit) of performance that are used in evaluating and controlling overseas operations. A questionnaire was sent to each of the “Fortune 500” firms. One hundred sixty-five (33 percent) responded. The research extended prior research by finding that in the late 1980s managers maintained their preference for U.S.-dollar-based statements just as they did in the 1970s and early 1980s. Managers still consider profit to be the strongest measure of success. However, the comparison of budgeted performance to actual performance has replaced return on investment as the second most important performance indicator. |
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