International Accounting

International Accounting : 

International Accounting

An International Perspective on Financial & Managerial Accounting : 

An International Perspective on Financial & Managerial Accounting Impact of Accounting Differences History and Background Environmental Factors Classification of Approaches Representative Accounting Issues

Impact of Accounting Differences : 

Impact of Accounting Differences Quality of External and Internal Decision Making Assessment of Competitors and International Opportunities Foreign Investment & Access to Capital Global Privatization

Accounting Development: Background : 

Accounting Development: Background Earliest References @ 3500 BC. The Crusades & International Trade 14th C. Italy: Double Entry Accounting Fr. Luca Pacioli Antecedents Writing/Arithmetic/Money/Private Property/ Partnerships/Credit/Capital Accumulation

Accounting Development: Background : 

Accounting Development: Background Migration Italy Spain Portugal France England International Trade & Operations 16th & 17th C. Colonialism Industrial Revolution From Proprietor to Partnership to Limited Liability Corp to Large Stock Company Massive Capital Requirements for RRs & Canals

Factors Affecting Accounting Development : 

Factors Affecting Accounting Development Culture International Political & Economic Ties Economic/Political/Legal Systems Relationship between business & providers of capital

Environmental Factors: Culture : 

Environmental Factors: Culture Educational Literacy Secondary & Higher education Vocational & Technical Training Social Conservatism Secrecy/Distrust Religion based principles Fatalism

Environmental Factors : 

Environmental Factors Economic/Political/Legal Level of Development Agricultural/Industrial/Service International Ties Inflation Individual Freedom/Government Control Property Ownership Code vs. Common Law

International Political & Economic Ties : 

International Political & Economic Ties Colonial Relationships British Commonwealth France Holland Spain Soviet Union Other Relationships European Union NAFTA ASEAN South America

Business & Providers of Capital : 

Business & Providers of Capital Investors & Creditors Few or Many Who are they? Relationship between Management & Investors/Creditors Capital Markets Stock & Bond market development & sophistication Use of International financial markets

Accounting Approaches : 

Accounting Approaches Macro-Economic: Accounting regarded as a tool to further national economic objectives determined & promulgated by government accounting information & reports serve the government’s objectives law & taxes specify framework for reporting compliance & tax accounting dominate uniformity supersedes judgment Sweden/Germany/Italy/France/Belgium/Spain/Japan

Accounting Approaches : 

Accounting Approaches Micro-economic: Economy & Nation Prosper as Individual Enterprises & Companies Prosper accounting information & reports assess the performance & efficiency of the enterprise economic theory & pragmatism provide the framework for reporting law encourages sound business practices accountants & auditors use “best judgment” to assess & report Netherlands/UK/US/Canada/Mexico

Accounting Clusters : 

Accounting Clusters British/American Oriented toward decision needs of investors & creditors non legalistic, “substance over form” Continental designed to satisfy government imposed requirements legalistic & conservative South American similar to Continental + “inflation” Mixed Economy combination of central planning & market economy International Standards

International Accounting Issues : 

International Accounting Issues Consolidations & Currency Gains & Losses Mergers & Acquisitions Capitalization R&D/Fixed Assets/Leases/Goodwill Inventory & Reserves Pension & Health Care Liabilities Taxes Performance Measurement Systems Auditing