Case Study 3-5

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Case Study 3-5 Discuss the qualitative concept of comparability. In your opinion, would the financial statements of companies operating in one of the foreign countries listed above be comparable to a U.S. company’s financial statements? Explain. The qualitative concept of comparability from our foreign countries to the United States is not comparable. At this time, our foreign countries cannot be compared to United States because of the size of the marketplace of the country (Schroeder, Clark, & Cathey, 2011). The reasons are there is very little information on equivalent sets of accounting principles. The investors cannot measure the accounting from the international financial. The stocks seem to be more impound in stock prices. The international context appears to possess the information on high quality standards (Schroeder, Clark, & Cathey, 2011). The legal and institutional obstacles that are inhibit by the foreign countries. This includes private litigations against the foreign firms. Next reason is the United States will not compare to the foreign country is the politics. There are different thought processes from the foreign countries, which include the socialist, the democratic, and the totalitarian in how the cash should be spent and separated (Schroeder, Clark, & Cathey, 2011). The legal system is another reason; the legal system is determine and influences by the strength of the county accounting profession. The extent economic developments are influenced by both the development and the application of its financial reporting practices (Schroeder, Clark, & Cathey, 2011). The countries with lower levels of economic development cannot compare to larger countries. Until the foreign countries can compare apple to apples, we will not be able to compare our financial statements. Under Generally Accepted Accounting Principles (GAAP), and the

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