Chapter 2: Worldwide Accounting Diversity · Worldwide Accounting Diversity § Nature of diversity...
Transcript of Chapter 2: Worldwide Accounting Diversity · Worldwide Accounting Diversity § Nature of diversity...
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Chapter2:WorldwideAccountingDiversity
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LearningObjectives
§ Provideevidenceofthediversitythatexistsinaccountinginternationally
§ Explaintheproblemscausedbyaccountingdiversity§ Describethemajorenvironmentalfactorsthatinfluence
nationalaccountingsystemsandleadtoaccountingdiversity§ Describeajudgmentalclassificationofcountriesbyfinancial
reportingsystem§ Discusstheinfluencethatcultureisthoughttohaveon
financialreporting§ Describeasimplifiedmodelofthereasonsforinternational
differencesinfinancialreporting§ Categorizeaccountingdifferencesinternationallyandprovide
examplesofeachtypeofdifference
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WorldwideAccountingDiversity
§ Natureofdiversityinaccounting§ Format§ Terminology§ Recognitionrules§ Measurementrules
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WorldwideAccountingDiversity:Reasons
§ Legalsystems§ Commonlaw§ Fewerstatutes—morecourtinterpretation§ Creationofprecedentsorcaselaws§ GreatBritainandotherEnglish-speakingcountries§ Accountinglawisdetailedandspecific§ Sourcesarenonlegislativeorganizations
§ Codelaw§ Morestatutes§ Non-English-speakingcountries§ Legislatedaccountingrules§ Accountinglawisgeneral§ Otherguidancerequired
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يكفي السلايد هنا اسباب التنوع في المحاسبه
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WorldwideAccountingDiversity:Reasons
§ Basisfortaxation§ Publishedfinancialstatements§ Germany—sametaxableincomeandbookincome
§ Financialstatementsadjustedfortaxpurposes§ U.S.—differenttaxableincomeandbookincome§ Differencebetweentaxandaccountingincomegivesrisetodeferredincometaxes
§ Providersoffinancing§ Accountinganddisclosureislessimportantwheremajorsourcesarefamilies,banks,andthegovernment
§ Accountinganddisclosureismoreimportantwheremajorsourcesarediverseshareholders
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اختلاف كيف كل دوله تدعم تمويلها
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WorldwideAccountingDiversity:Reasons
§ Inflation§ Somecountrieshavehistoricallyhighratesofinflation§ Necessitatesadjustmentstooffsetinflation
§ CommoninLatinAmericancountries§ Politicalandeconomictiesaffecthowaccountingrules
areconveyed§ Correlationoffactors
§ Commonlawcountrieshavedomesticlistedcompaniesrelyingonequityforcapital.
§ Codelawcountriestendtolinktaxationtoaccountingstatementsandrelylessonfinancingprovidedbyshareholders
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ProblemscausedbyAccountingDiversity
§ Preparationofconsolidatedfinancialstatements§ Accesstoforeigncapitalmarkets§ Comparabilityoffinancialstatements§ Lackofhigh-qualityaccountinginformation
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PreparationofConsolidatedFinancialStatements§ Problemsdueto:
§ Localregulations§ BooksInlocalcurrency§ Localaccountingprinciples
§ Requires:§ Considerableeffort§ Additionalcost§ Expertiseindifferentcountry’saccountingstandards
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المشكله هذي ايش تتطلب عشان تنحل
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AccesstoForeignCapitalMarkets
§ Requiresfinancialstatementsasperlocalaccountingstandards
§ Considerableeffortandcostinvolved
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ComparabilityofFinancialStatements
§ Lackofcomparabilitybetweenfinancialstatementsfromdifferentcountries
§ Thisadverselyaffects:§ Investmentdecisions§ Lendingdecisions§ Performanceanalysis§ Foreignacquisitiondecisions
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LackofHigh-QualityAccountingInformation§ Lackofhigh-qualityaccountingstandards§ Inadequateriskassessment§ Lackofappropriatedisclosurerequirements§ Disclosuredeficiencies
§ Related-partytransactionsandoff-balance-sheetfinancing§ Highexposuretoforeignexchangerisk§ Investmentsinhighlyspeculativeassets§ Contingentliabilitiesguaranteeingforeigncurrencyloans§ Loanlossprovisions
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AccountingClusters
§ Accountingmodels§ TheFairPresentation/FullDisclosureModel(Anglo-SaxonorAnglo-Americanmodel)§ Orientedtowardthedecisionneedsoflargenumbersofinvestorsandcreditors
§ UsedinEnglish-speakingcountriesinfluencedbytheUnitedKingdomortheUnitedStates
§ TheLegalComplianceModel(ContinentalEuropeanmodel)§ Legalistic§ Usedtoprovideinformationfortaxationandgovernment-planning
§ UsedinEurope,Japan,andcodelawcountries§ TheInflation-AdjustedModel§ ResemblestheContinentalEuropeanmodel§ Requiresextensiveuseofadjustmentsforinflation
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JudgmentalClassificationofFinancialReportingSystems§ DevelopedbyNobes§ Micro-based—Anglo-Saxonmodel§ Macro-uniform—ContinentalEuropeanmodel
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Micro-basedaccountingsystems
§ Firstsub-classinfluencedby§ Businesseconomics§ Accountingtheory§ Example:Netherlands
§ Secondsub-classinfluencedby§ Businesspractice§ Pragmatic§ Example:British-origin§ UnitedKingdomandUnitedStatesdominated
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Macro-uniformaccountingsystems
§ Firstsub-class:§ Alignedwithnationaleconomicpolicies§ Example:Sweden
§ Secondsub-class:§ Continental:government,tax,legal§ Example:ContinentalEuropeancountries§ Law-basedfamily:Germany,Japan§ Tax-basedfamily:SouthernEuropeancountries
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Exhibit—2.5Nobes’s JudgmentalClassification
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InfluenceofCultureonFinancialReporting
§ Hofstede’sculturaldimensions§ Gray’saccountingvalues§ ReligionandAccounting
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Hofstede’sculturaldimensions
§ Fourculturaldimensions§ Individualism(vs.collectivism)§ Preferenceforalooselyknitsocialfabric
§ Powerdistance§ Acceptanceofhierarchyandunequalpowerdistribution
§ Uncertaintyavoidance§ Comfortlevelwithuncertaintyandambiguity
§ Masculinity§ Emphasisonmasculinevaluesvs.femininevalues
§ Long-termorientation§ Focusonfosteringvirtuesorientedtowardsfuturerewards
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Gray’sAccountingValues
§ Fourwidelyrecognizedaccountingvaluestodescribeacountry’saccountingsubculture§ Professionalismvs.StatutoryControl§ Uniformityvs.Flexibility§ Conservatismvs.Optimism§ Secrecyvs.Transparency
§ Believesthatnationalculturalvaluesaffectaccountingvalues
§ Accountingvaluesofconservatismandsecrecyhavethegreatestrelevance
§ Gray extendedHofstede’smodeltounderstandhowcultureinfluencesthecorporatereportingsystems
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Exhibit—2.8FrameworkforAccountingSystemsDevelopment
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ReligionandAccounting
§ Religiondefines§ Nationalcultureinmanypartsoftheworld
§ Ithassignificanteffectonbusinesspractice§ Example:BankingcompaniesunderShariah,theIslamiclawofhumanconductderivedfromtheKoran
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ASimplifiedModeltoExplainFinancialReportingInternationalDifferences§ Nobes’s modelarguesthatinternationalreportingdifferences
areduetodifferentpurposes§ Country’sfinancingsystemisconsideredmostrelevantfactor
todeterminethepurposeoffinancialreporting§ Nobes dividesreportingsystemsintotwoclasses—AandB
§ ClassA§ Strongequity-outsidersystem§ Lessconservative§ ExtensiveDisclosure§ Accountingpracticediffersfromtaxrules
§ ClassB§ Weakequity-outsideshareholderfinancing§ Moreconservative§ Disclosureisnotextensive§ Accountingpracticefollowstaxrules
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FurtherEvidenceofAccountingDiversity
§ Categoriesbasedonaccountingdifferences§ Financialstatementsincluded§ Financialstatementformats§ Levelofdetailinfinancialstatements§ Terminology§ Disclosure§ Recognitionandmeasurement
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ارجع للكتاب اوضح
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EndofChapter2
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