CONTINENTAL MODEL is an accounting model. There are other accounting systems which differ from the U.S. accounting model. U.S. GAAP and FASB standards are not the only accounting principles used internationally; for example, many countries reverse the U.S. debit and credit system. Many countries with high rates of inflation account for inflation in financial reports much more than the U.S. does. Also, for any company operating internationally there is the currency exchange translation problem when consolidating financial statements.
YIELD CURVE, in investments, is a graph depicting the change in yield as it relates to the time to maturity of a fixed income security. A parallel yield curve shift refers to a change in interest rates that is the same at every maturity point along the yield curve, e.g., when short-term rates rise 100 basis points, intermediate and long-term rates also rise 100 basis points.
REASONABLENESS TEST is where the expected value is determined by reference to data partly or wholly independent of the accounting information system, and for that reason, evidence obtained through the application of such a test may be more reliable than evidence gathered using other analytical procedures.
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