Difference in Intl Accounting

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Question 3(a) Discuss and enumerate five (5) reasons (except culture) for international accounting differences. State and explain these reasons for international differences citing suitable examples in each case. ( 50 marks ) The accounting profession has long identified the need for a harmonised accountancy framework, and introduced the International Accounting Standards Board (IASB), whose ultimate goal is to create one single international standard, the International Financial Reporting Standards (IFRSs). Even though countries worldwide are adopting, or at least planning to adopt, the international standards, adoption varies from full adoptions immediately, full adoption with time lags, selective adoption and national standards developed based on IFRSs. With vast differences in economic and cultural conditions, a wide array of different financial reporting practices exist around the world. This leads to significant differences in profits and net assets when different countries’ accounting rules are applied to the same transactions. Hence, I shall discuss five reasons for international accounting differences. 1. Religion Religion transcends national boundaries, and in reality, accounting standards are not immune from religious influence. The fact that accounting harmonization seems focused primarily on bringing the world’s accounting systems into harmony with IAS (which are based on Western standards) also infers that Judaic-Christian traditions and values may influence accounting standards, but may not accommodate other religions, such as Islam. Hamid, Craig and Clarke (1993) examined the Western standards on accounting practices have been futile in gaining recognition in Islamic cultures, which exist in numerous countries, and how issues on religion had previously occupied minimal space in the accounting
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