Scope of Accounting
Accounting
must be responsive to the changing needs of society and must reflect the
conditions of cultural, economic, legal, social and political environment of
the communities in which it operates. Thus accounting should be fixed in a useful
position technically and socially. History of accounting and accountants,
showed changes continuously, a process that seems passable accounting
consistently. At one time, more like a system of accounting records for certain
banking services and for tax collection plan. Then came the double-entry
bookkeeping to meet the needs of the trading business.
International Accounting:
aimed
at expanding public accounting (general purpose) nationally oriented, in a
broad sense for:
•
Comparative
analysis of international
•
Measurement
of the accounting reporting issues unique to business transaksi2 mulitnasional
•
accounting
for the needs of international financial markets
•
harmonization
of financial reporting diversity through political activities, organizations,
professions and manufacturing standards
Internationalization of Accounting Profession
International
investment community would want the international cooperation between
professional accountants and the organizations - organizations internasionaal
accounting professionals must be able to provide a better harmony in the world.
International Professional Practice
International
practice of accounting professionals found in 3 levels, which is almost
parallel to the structure idustri sectors of the economy or the general
organizational pattern of sisttem provision of professional services. Depth is
the most integrated companies "Big Six" yaang domiciled in the United
States-United Kingdom, which has a single name throughout the world. Although
there are some operational differences anara into six companies, they are
similar to each lainnya.Ada profit sharing among partners throughout the world.
Technical accounting, auditing and consulting services globally harmonized
through complicated procedures. Example: ernest & young, At the second
level there are 8 to 10 companies that operate globally with one name but with
base atar federation of national companies selected. Instigated under the name
combines the advantages of international and professional work standards internationally
agreed with national corporate identity and business development efforts in
their countries. Ex: gramnd Thornton.
Cooperation
at the third level is informal and often limited basis: If it takes
"Located on professional accounting firms in regional and small accounting
firms as well as individual practitioners whice working with CPA office
There are three main forces that drive international dimension into the accounting field that continues to grow. The power that power is
1. Environmental factors,
2. Internationalization and accounting disciplines, and
3. internationalization of the accounting profession.
Environmental Factors
Both developed
countries or developing countries big or small in one hemisphere or the other,
everyone having a closer international relations and high economic dependence.
There are 15 environmental factors that have an impact on accounting. Electoral
lists are subjective and may change with time.
Internationalization of
Accounting Discipline
Three key factors have played a decisive role in
internationalism (field or discipline) accounting:
1. Specialization
As with any medicine, now specializes in accounting is a
fact for example in the USA and Jerman.akuntansi internasionak is a recognized
expertise in the field of accounting, together with government accounting, tax
accounting, auditing, management accounting, accounting systems and behavior of
information.
2.The international nature of a number of technical
problems erdagangan international business operations multinasinal, foreign
investment and market transactions are unique problems in accounting
internationalism
3. Historical reasons
The history is the history of international accounting.
Double entry bookkeeping which is considered as the origin of the current
accounting that migrated to several countries including Indonesia. Wansan
accounting thus, is international
Each difference ACCOUNTING ACCOUNTING WITH OTHER INTERNATIONAL
Each difference ACCOUNTING ACCOUNTING WITH OTHER INTERNATIONAL
International accounting differences with other accounting found in:
•
The
report is a multinational company (multinational company - MNC).
•
Operation
transactions across borders - borders.
•
Reporting
addressed to users located in countries other than the company.
Three Field Scope International Accounting
Three Field Scope International Accounting
1.
Measurement
2.
Disclosure
3.
Auditing
Trend International Accounting
1.
Accounting
widely used in various countries, but each - each country to implement the
standards and practice of accounting in accordance with national law.Finally,
to this day continue to be able to narrow the differences in the measurement,
disclosure, and auditing.
Role of Accounting in the Trade and Capital Flows
1.
Studying
international accounting is one of the efforts to reduce differences in the
perception of accounting.
2. All countries tend to reduce barriers to Trade and control
of capital / investment
3.
IT
advancements led to radical changes in the economy, production and distribution
INTERNATIONAL ACCOUNTING ACCOUNTING DIFFERENCES WITH
OTHER
Along
with business and financial markets that have a lot towards internationalization,
as well as differences in international accounting becomes more important from
the standpoint of international financial statement analysis. International
accounting differences brought a number of problems from the point of view of
financial analysis.
1. First, in an effort to assess foreign companies, there is
a tendency to look at income and other financial data from the point of view of
his home country, and because of the danger of ignoring the effects of
accounting differences. Unless significant differences were taken into account,
possibly with some involvement restatement, it may have very serious
consequences.
2. Second, awareness of international differences suggest
the need to be familiar with accounting principles foreign country as a
destination to get to know better income data in the context of measurement.
3. Third, the issue of the nature that can be compared and
harmonization of accounting is reviewed in the context of alternative
investment opportunities.
The differences that arise due to:
1.
economic
growth,
2. inflation,
3. political system,
4. education,
5. accounting
profession,
6. tax laws,
7. money market, and
8. capital.
In this case,
Choi and Levich (1991) provides a useful framework to analyze the impact and
relevance of the similarities and differences in the economic environment is
not resemblance. In environments or situations similar to accounting,
accounting difference is un logisan and clues to the results can not be
compared. Logical practices suggested accounting treatment similar / same. When
the economic environment is not the same, but, as in the case of international
investment, accounting differences can be justified, particularly where lies
the inequalities that exist in corporate governance, tax laws, finance,
business customs, culture, accounting and so on. On the other hand, a similar
accounting treatment may be justified when several factors have some
significant similarities. Understanding the importance of environmental factors
and cultural / culture are concerned.
4.
In
a survey to examine how capital market participants respond to differences in
accounting, Choi and Levich exemplifies the opinions of institutional
investors, multinational company that issued the securities, the bank under
international securities, and regulatory agencies. Only 48% of all respondents
interviewed influenced by differences in international accounting, but it seems
52% of respondents claimed not affected by differences in accounting facts
"coping" a variety of factors, including:
·
The
development capabilities of foreign GAAP,
·
Repeat
their own accounts with GAAP,
·
Use
other sources of information, and
·
Using
different investment approaches, such as macro-economic approach
"top-down" or from the top down to the state paired with a
diversified selection of shares in the country.
Similar approach, used by the respondents which
investment decisions likely influenced by differences in accounting. The
results of this study suggest that the problems and costs arising from
differences in international accounting are very real and need to be
investigated further to be researched and resolved. In the end, there is a
clear need to look at the differences and their impact on the measurement of
income and corporate performance.
SOURCE (REFERENCE)
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