Cons idera#l e diffe rence s e$is t acros s count ries i n the acc ountin g trea t%ent of%an& ite%s. These differences can result in significantl& different a%ounts #eing reported in the financial state%ents prepared #& co%panies using different 'AA!. A (ariet& of factors influence a countr&)s accounting s&ste%.egal s&ste% + in code la, countries accounting rules tend to #e legislated co%%on la, countries tend to ha(e a non-legislati(e organiation that de(elops accounting standards. T a$ati on + f inanci al sta te%en ts s er(e a s th e #as is for ta$a tion i n%an & cou ntrie s. In those countries,ith a close linkage #et,een accounting and ta$ation accounting practice tends to #e%ore conser(ati(e so as to reduce the a%ount of inco%e su#ect to ta$ation. C.!ro(id ers of financ ing + in those count ries in,hic h fa%il&%e% #ers #ank s and the go( ern%en t are the%aor pro (id ers of #us ine ss fin anc e the re ten ds to #e les s de% and for pu# lic accou nta #il it& and inf or% ati on dis clo sur e.

1. Manual International Accounting Doupnik Solutions
2. Manual International Accounting Doupnik And Perera

In cou ntr ies,here shareholders are a%aor pro(ider of financing the de%and for infor%ation%ade a(aila#le outside the co%pan& #eco%es greater. Inflat ion + countries,i th chronic hig h inflatio n adopt accoun ting princ iples in,hich traditional historical cost accounting is a#andoned in fa(or of inflation adusted figures.

Manual International Accounting Doupnik Solutions

E.!olit ical and econo%ic ties + through pre(i ous coloni ation  a Briti sh st&le of acc oun tin g is used throu gho ut%os t of the for%er Briti sh E%pire. T ies #et,e en cou ntr ies als o hel p to e$p lai n si% ila rit ies #et,ee n the 0.S. And Can ada  and increasingl&  the 0.S. Differences in acc ounting across countries cause se(eral pro#le%s. Consolidating foreign su#sidiaries re1uires that the financial state%ents prepared in accordance,ith foreign accounting rules%ust #e con(erted into parent co%pan& 'AA!

Manual International Accounting Doupnik And Perera

Co% pan ies inter est ed in o#tai nin g cap ita l in forei gn cou ntr ies%a& #e re1u ire d to pro(id e finan cial state%en ts prepared in accor dance,ith accou nting rules in that countr& ,hich are likel& to differ fro% rules in the ho%e countr&. In( est ors inte res ted in in( est ing in for eig n co% pan ies%a& ha(e a dif fic ult ti%e in%aking co%parisons across potential in(est%ents #ecause of differences in accounting rules across countries. There i s a lac k of 1ua lit& a ccoun ting st andard s in so%e par ts of the,o rld. The 2 4 East Asian financial crisis,as at least partiall& attri#uta#le to a lack of high 1ualit& accounting in the region. There are t,o%aor classes o f accounting s&s te%s the%ic ro-#ased class and t he%acro- unifor% class.

The%icro-#ased class of accounting is found in co%%on la, countries,here there is a separation of accounting fro% ta$ation and shareholders are an i%portant source of. The%acro-unifor% class e$is ts in code la, countries, here accounting ser(es as the #asis for ta$ation and fa%ilies #anks and go(ern%ent are the%aor pro(iders of capital. Inco%e%easure%ent is%ore conser(ati(e and dis closure is lo,er than i n the%icro-#ased class of countries. 6ati onal cultu re is another fac tor long thoug ht to influe nce a countr& )s acco unting s&s te%. 0s ing 7of st ede )s 82 9; soc iet al (al ue di% ens ion s 'ra& 82 99; de( elo ped the follo,ing h&potheses: A.

Conser(atis% h&pothesis. Count ries high on uncer taint & a(oid ance and long-te r% orientation and lo, on indi(idualis% and%asculinit&,ill foster a%ore conser(ati(e approach to%easure%ent. Secrec & h&pot hesis + count ries high in po,er dista nce uncerta int& a(oidanc e and long-ter% orientation and lo, on indi(idualis% and%asculinit&,ill e$hi#it%ore secrec& 8less disclosures; in accounting reports. And in(entor& is called stock.? Disc losure diff erenc es + for e$a%ple co%p anies in so%e countries pro(id e e$tensi(e disclosures related to their e%plo&ees.