by : joicenda n.. accounting provide infomation to be used in making economic decisions decision...
TRANSCRIPT
INTRODUCTION TO
INTERNATIONAL ACCOUNTING
By : Joicenda N.
Accounting provide infomation to be used in making economic decisions
Decision makers use both qualitative & quantitative information from various sources
Accounting provides quantitative information that is primarily financial in nature
Accounting role
Linkage between decision makers & Accounting:
Information Needs
Information Communication
Information is provided by the accountant in the form of reports
The reports are based on collecting and processing data from economic events of the entity
AccountingDecision Makers
GlobalizationIn the age which economy is becoming global, natural, human and financial resources often can be shifted from one part of the world to another part conveniently, efficiently, and at great speed. International Accounting provides pertinent information in decision makers in the age of a global economy, helping them make resources allocation decisions that maximaze the benefit to humankind
Another reason ( a student’s prespective )????
Why Study International Accounting
International Accounting is defined as :
Accounting for international transactions, comparisonsof accounting principles in different countries, andharmonization of diverse accounting standard worldwide ( Iqbal , 1997 )
DEFINITION
Some characteristics of the age of the Global Economy are :
1. International business2. Blurring Boundaries3. Dependencies on
international trade
Characteristics of the age of the Global Economy
The survey which is done by Delloite Touche Tomatsu International informs several reasons for 400 companies in 20 developed countries to get engaging in international operations. They are :
a) Growth Opportunitiesb) Less dependence on domestic economyc) Customer demandd) Lower Costs
Go International Operations
The theories which generally support the involvement of a company in international business
1. Theory of Comparative Advantage2. Imperfect Market Theory3. Product Cycle Theory4. Transfer of Technology and Strategic Alliances
International business creates economic interdependencies between countries. This condition increase new significant topics that listed below :1. Foreign currency transactions2. Foreign currency translations3. Taxation of Internal operations4. Consolidation of financial statements of foreign
and affiliaties5. Multinational transfer pricing6. Comparative Disclosure requirements
Challenges facing International Accounting
NAFTA ( The North American Free Trade Agreement ) 3 countries: Canada,Mexico, USA + Chile ; Eff: Jan 1, 1994
EU ( European Union ) 12 countries of Western Europe; eff ; Jan 1, 1993,
GATT ( General Agreement on Tariffs and Trade ) – ( late 1993 )
The (Asian) Pacific Rim Region : Japan & some other Pasific Rim Countries have emerged as fastest economic region in the world, although they are not rich in natural resources ( The 4 Tigers of Asia, ASEAN )
Asia Pasific Economic Corporation ( APEC ) 18 countries, Nov 1993
International Trading Agreement
The New Topics above create new challenges for accountant in facing International accounting. Those are :
a) Skills and competencies of accountantsb) Understanding the cross-functional linkagesc) Financial analysis and comparability d) Global Information system development
Five Major environmental influences on Accounting :
1) Economic System2) Political System3) Legal System4) Educational system5) Religion
Environmental Influences on Accounting
A. Trading BlocsB. International Governmental OrganizationsC. Professional OrganizationsD. Global Capital MarketsE. Multinational CorporationsF. Technological AdvantagesG. Worlwide Political Developments and
TrendsH. Management Accounting – relevance
regained
International Agents For Change in Accounting
1. Iqbal, M. Zafar ; Melcher Trini U. dan Elmallah, Amin A., 1997, International Accounting , A Global Prespective. International Thompson Publishing
2. Heti Triaswati, Arif Wasisto dan Mahfud Sholihin, Akuntansi Internasional, Edisi 2005/2006. BPFE Yogyakarta
References