4. Locate the 2015 Form 20-F of Honda Motor Co. a. First, determine whether the

Question

4. Locate the 2015 Form 20-F of Honda Motor Co. a. First, determine whether the financial statements were prepared in accordance with IFRS, and describe where you located this compliance statement. Also in this note about presentation, what does the company say with respect to its initial application of IFRS? Explain. Considering what you learned in this chapter, why is Honda permitted to prepare financial statements for the U.S. SEC in accordance with IFRS? Is Honda permitted to use IFRS to prepare financial statements filed with its home country? Explain, and describe how you found this information. Finally, identify Honda's auditor and describe the auditing standards applied by the company's auditors. b. c. d. e.

Explanation / Answer

a.

Yes, FS are prepared in accordance with IFRS, it is mentioned in NOTE ON PRESENTATION at page 1.

b.

Company states that they are applying IFRS in preparing their financial statements for the first time in 2015 and till March 31st 2014, financial statements were prepared in accordance with US GAAP. They further clarify that besides financial statements, other disclosures in the financial statements are also updated in accordance with IFRS. Company reports that "we make an explicit and unreserved statement of compliance with IFRS, as issued by the IASB, with respect to our consolidated financial statements as of and for the fiscal years ended March 31, 2014 and 2015 included in this Annual Report."

c.

As per SEC, for foriegn companies trading in any security exchange in USA are not required to prepare fiancial statements as per GAAP and financials prepared in accordance with IFRS also will be acceptable. This was done to attract higher investor from foriegn companies by easing out compliance norms.

d.

In page F-47 and F -48, poing G, Dividend from Retained Earnings, it is mentioned that company uses Generally Accepted Principles of Japan in preparing their non consolidated accounting records.

e.

Honda's audit was conducted by KPMG and its affliates and associates.

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