...first of January 1958 with 27 member countries. The EU is located primarily in Europe (European Union, 2013). France, Germany, Italy, Netherlands, Belgium and Luxembourg founded the Treaty of Rome in the year 1957 and established The European Economic Community. (The European Union, 2012) The European Union’s main aim was create a business environment that’s united by harmonizing taxes and laws of companies, to form incorporated capital markets and endorse openness between counties during good and labor transfer. (Aswathapa, 2010) EU Harmonizing efforts The European Union EU has worked to harmonize accounting standards within the EU by using two directives, which are the fourth Directive (1978) and the seventh Directive (1983) that were able to enforce laws. After applying the EU new accounting standards they decided in the year 1995 to transfer to international standards. Moreover, the transfer was done by following the IASC efforts. In the year 2000 the European Union requested all the companies to follow the IFRS standards when preparing consolidated statements. (Khan, 2008) The directives used by the EU were the most appropriate way to minimize the differences between the twelve European Union countries. According to Dedman (2010) “directives are legislative instruments from the commission to the member state “. According to the fourth and the seventh company laws applied by the EU, a synchronized basis of the accounting preparation is provided, where the accounts...
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...------------------------------------------------- International Accounting Standards * Print * PDF * Cite * Comparable, transparent, and reliable financial information is fundamental for the smooth functioning of capital markets. In the global arena, the need for comparable standards of financial reporting has become paramount because of the dramatic growth in the number, reach, and size of multinational corporations, foreign direct investments, cross-border purchases and sales of securities, as well as the number of foreign securities listings on the stock exchanges. However, because of the social, economic, legal, and cultural differences among countries, the accounting standards and practices in different countries vary widely. The credibility of financial reports becomes questionable if similar transactions are accounted for differently in different countries. To improve the comparability of financial statements, harmonization of accounting standards is advocated. Harmonization strives to increase comparability between accounting principles by setting limits on the alternatives allowed for similar transactions. Harmonization differs from standardization in that the latter allows no room for alternatives even in cases where economic realities differ. The international accounting standards resulting from harmonization efforts create important benefits. Investors and analysts benefit from enhanced comparability of financial statements. Multinational...
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...implementation of International Accounting Standards Theodosia Leventi Department of Business Administration, T.E.I. of Larissa, Greece leventi@teilar.gr Abstract This paper belongs to the category of literature review. In this descriptive article we take a brief look at the impacts of the implementation of International Accounting Standards. The continued globalization of business has led to the development of internationally applicable standards and codes of practice. The remarkable expansion of international trade and business, the international co-operation among countries and the breaking down of national barriers led to new challenges and new problems too. Problems in the analysis and comparison of financial reports and differences in auditing and taxation practices among countries made necessary the application of International Accounting Standards. Harmonization of this practice in order to get closer to a universal accounting language is affected by many factors such as: economic, financial, social, legal, cultural, political and others. Moreover, the level of preparedness for each country is significantly associated with many other factors. This process, as every new measure, had both positive and negative effects. So, this study highlights the advantages and disadvantages of adopting a uniform set of International Accounting Standards worldwide and also examines their volatility effects. Keywords: International Accounting Standards, Adoption, Positive...
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...University, Australia Abstract This paper investigates the influence of national culture on banking disclosures. Seventeen developed and developing countries with a representative sample of 37 listed domestic commercial banks were examined in 2004. Long-term orientation is found to be a non-significant cultural value with banking disclosures. The explanatory power for banking disclosures is found to be similar to the findings in Gray and Vint (1995) with a cross-section of industries. More importantly, this study recommends that long-term orientation should not be used as part of the cultural framework for disclosures due to bias data. Hence, Gray’s (1988) hypothesis on the secrecy / transparency dimension should be maintained with respect to the original four cultural values. JEL Classification: G21, M41, O57 Keywords: Culture, banking disclosures, transparency 1. Introduction The objective of this paper is to report on the empirical findings of the two research questions proposed by Hooi (2004) that may improve the Gray and Vint (1995) model of cultural influence on accounting disclosures. The first proposal was that extending the Gray and Vint study with the new inclusion of Hofstede and Bond’s (1988) cultural value of long-term orientation gives the opportunity to better understand the association between national culture and accounting disclosures. The second proposal was that by focusing on only one industry, specifically banking, more significant results may be ...
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...Reporting Standards in Developing Countries: The Case of Nigeria Abdulkadir Madawaki College of Business, Universiti Utara Malaysia Sintok, 06010 Kedah, Malaysia E-mail: abdulkadirmadawaki@yahoo.com Received: September 16, 2011 doi:10.5539/ijbm.v7n3p152 Abstract The study focused on the adoption process of International Financial Reporting Standards (IFRS) on a developing economy, with particular reference to Nigeria. The paper is based on the data obtained from literature survey and archival sources in the context of the globalization of International Financial Reporting and the adoption of International Financial Reporting Standards (IFRS).Nigeria has embraced IFRS in order to participate in the benefits it offers, including attracting foreign direct investment, reduction of the cost of doing business, and cross border listing. In implementing IFRS Nigeria will face challenges including the development of a legal and regulatory framework, awareness campaign, and training of personnel. Recommendations were made to forestall such challenges which include strengthening education and training, establishment of an independent body to monitor and enforce accounting and auditing standards. Keywords: Financial reporting, Adoption, Accounting standard and Developing countries 1. Introduction Globalization of capital markets is an irreversible process, and there are many potential benefits to be gained from mutually recognized and respected international accounting standards. The adoption...
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...system of accounting to be inefficient. 2.Venice’s commerce was driven by sea traffic. 3.The Genoese system was the first to imply that unlike items could be compared in terms of a common monetary unit. 4.Double entry bookkeeping quickly had world-wide acceptance, as the British accepted it in the 1400s. 5.When hyperinflation exists, alternative systems to historical cost become necessary. 6. The International Accounting Standards Board, an international organization dedicated to the diversity of accounting standards worldwide. 7. One trend in European securities markets is consolidation. 8. The continental accounting system is closely linked to the tax collection system. 9. The first step into international business is usually the creation of a foreign subsidiary. 10. If a firm is not involved in international commercial transactions, knowledge of international business is unnecessary. Multiple Choice Learning Objective #1.1: Identify the key trends in the development of accounting through history 1. The Crusades were important in the development of accounting, because __a. the Arabs first developed double entry accounting, which was then adopted by the Italians. __b. the Christians needed double entry accounting to keep track of the relative profitability of the different Crusades. __c. the trade routes shifted the commercial center from Italy to Constantinople __d. none of the above. 2. The major Genoese influence on accounting was __a...
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...Uncertain Supply Chain Management 2 (2014) 61–72 Contents lists available at GrowingScience Uncertain Supply Chain Management homepage: www.GrowingScience.com/uscm Sustainable accounting reporting practices of Indian cement industry: An exploratory study Shagufta Khana , Vineet Chouhanb*, Bibhas Chandrac and Shubham Goswamib a Research Scholar, School of Management, Sir Padampat Singhania University, Udaipur-India Assistant Professor, School of Management, Sir Padampat Singhania University, Bhatewar, Udaipur-India, 313601 c Associate Professor, School of Management, Sir Padampat Singhania University, Bhatewar, Udaipur-India, 313601 b CHRONICLE Article history: Received September 10, 2013 Received in revised format 10 December 2013 Accepted February 25 2014 Available online February 27 2014 Keywords: Cement Industry Sustainability Financial Information Environment Accounting Reporting Sustainable Reporting Practices ABSTRACT Cement is the single most important and profitable product in the building material sector. With the economic boom, in India, Indian cement industry is a market of opportunities waiting to be tapped. However, at the same time cement industry is also experiencing a surge in demand. Production of Cement will always release carbon dioxide and change in the climate of the earth that is why despite its profitability, the cement industry faces many challenges regarding environmental concerns and sustainability issues. In order to minimize the impact of all...
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...and Applications The state of accounting in Egypt: a case Khaled Dahawy The American University in Cairo Nermeen F. Shehata Cairo University Tad Ransopher Georgia State University Abstract Egypt, one of the largest Middle East economies, is beginning its transition to a market economy. As a developing nation, Egypt has witnessed several changes in its accounting system during last two decades. This case provides an analysis of the Egyptian accounting system with emphasis on the development of the Egyptian Accounting Standards. In addition, this case makes recommendations for the reformation of the Egyptian accounting system. Keywords: Egypt, International accounting standards, Egyptian accounting standards, Egyptian accounting system, Privatization, Culture The state of accounting, Page 1 Journal of Business Cases and Applications 1. INTRODUCTION The purpose of this case is twofold. The first goal is to present an analysis of the development of the Egyptian accounting system. The second goal is to provide several recommendations to facilitate the Egyptian accounting reformation. Once accounting reformation occurs, Egyptian companies can prepare financial reports that will be of greater benefit than those at present. To Egyptian companies the result will be an increase in foreign investment and funds raised from external sources. With these goals as the objective, Egyptians need to comprehend successful accounting systems and extract that which may...
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...Climate Change and its Effects on Accounting Practices William Conder Accounting 5233 November 26, 2013 Abstract in Climate change is a subject that invokes many different opinions and reactions from different people in different regions. Although there is a general consensus in the scientific and environmental advocate communities as to that the worldwide climate is changing, specifically warming, and that the activities of man are the primary cause, as for the degree of change and the possible effects, there is anything but a consensus. There is a fairly new concept that is taught in many businesses, colleges, and universities called the triple bottom line. This is referring to the three things that businesses should concern themselves with and strive to achieve excellence in if they wish to be sustainable; they are “profit, people, and the planet” (Elkington, 1995). The purpose of this research is to find out and explore some different ways that businesses today are utilizing good sustainability practices, and dive into some other areas like accounting for carbon emissions, and also seeing how accounting for predicted outcomes might work in the business environment. The environment affects us all and any sort of change, contingency, or preparation has to be accounted for, so this work is designed to find out how it is being done, and things that could be done to improve business. The triple bottom line The age old practice of businesses being concerned strictly with...
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...INFLUENCE ON ACCOUNTING DEVELOPMENT 1 2.1 Introduction In international accounting research, environmental influence is the key to understanding one country’s accounting system. "To a large extent, accounting is a product of its environment. That is, it is shaped by, reflects, and reinforces particular characteristics unique to its national environment" (Radebaugh and Gray 1997). From the late 1960s, researchers in international accounting have tried to categorize countries according to a series of criteria, which have been developed on a deductive or conductive basis. These criteria tried to explain the reasons for accounting differences between countries; they aimed to describe and compare different systems with each other in an efficient way. There are several advantages to categorize and analyze the differences among countries: First, it promotes improved understanding of the complex realities of accounting practices, as well as the factors that shape a country’s accounting regulations; Second, it provides useful information for solving some of the important accounting problems that exist in the world. For example, it can help policymakers assess the prospects and problems of international harmonization; Third, it can assist in the training of accountants and auditors who operate internationally; And finally, it can enable a developing country to better understand the available and appropriate types of financial reporting by seeing other countries’ use of particular...
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...tremendously. With the United States having so many businesses there is a consistent need to make sure that the accounting process is done the same all over the country, and to help prevent fraudulent or any misleading information. This issue has become even more important with the evolution of traditional business to ecommerce which leads to the constant moving of money between countries. Accounting has the ability to be done in many different forms and fashions, but the world had narrowed it down to only two accounting practices which are IFRS and GAAP. Accounting practice has been around for hundreds and thousand years and could be trace back to ancient times. In earlier years of accounting and its development started in early Mesopotamia Accounting can also be closely related to writing, counting, and early auditing systems used by ancient Egyptians and Babylonians. The International Financial Reporting Standards (IFRS) has been adopted by more than one hundred and ten countries and was created in the early 2000’s versus its counterpart the Generally Accepted Accounting Principal (GAAP) which was created in 1978. These two types of accounting practices are similar to get to the final result but have big differences. The GAAP is more of a rule based systems and the IFRS is along the principal based system. The GAAP is maintained and improved by the Financial Accounting Standards Board (FASB). They are a private company...
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...Developing Conceptual Framework Is An Impossible Possibility Accounting Essay Accounting is playing an important role in nowadays society. It provides financial information to the user to make business decision. However, accountants have to follow accounting standards when they are providing the information. We may question what the principle of those standards is. Financial accounting theory was created as the principle in making standards, and conceptual framework for accounting built up. This essay is going to talk about whether developing a conceptual framework is an impossible possibility. In order to talk about this, I am going through some history of accounting, the definition and compare the conceptual framework under different standards. Accounting was created for thousands years ago. It dates back more than 7,000 years which is the time of ancient Babylon, Assyris and Sumeria. (Friedlob, G. Thomas & Plewa, Franklin James, 1996) At that time, people did accounting for their personal need. With the change of the times, accounting no longer work for personal need. People need common standards for stakeholders to use when making decisions. Countries built up Generally Accepted Accounting Principles (GAAP) to set up rules for accountants to do accounting. When the business is becoming bigger, people find out that it is hard to understand other countries' accounting report. People need international standards, so some international standards come out, Such as International...
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...Management accounting in Nepalese perspective The history of account keeping in Nepal by the government is very old. Mandev, the first king of Nepal in Lichhavi period, had circulated the first coin called "Mananka" during the period 464-491 A.D. similarly, King Mahendra Malla had circulated the coin named "Mahendra Malla" in the Malla period. This seems to be the main step to record the nation transactions in a proper way and manner. It is said that a small number of financial transaction used to be performed in Lichhavi and Malla periods. It proves there was a certain form of accounting to record transactions. written records of accounting have been traced back to the 18th centuries in Nepal. After the unification of the nation in 1768(1825 B.S.) by the King Prithivi Narayan Shah the great, the chief of the district level solders used to keep the accounts of the government offices. In 1814 a book called "Laldhadda" was created for recording matters about land management and another book called "Mothdhadda" was also used for keeping accounts. these two records were important steps in the history of accounting in Nepal. Again, after a long gap in 1868 an office called "kitab Khana" was established for recording the salaries paid to government personnel, which is still in use. In the process of development of accounting in 1879 Kharidar Gunawanta, a senior official of that time propounded "Syaha Sresta Pranali" which was an advanced form of accounting and was up to fiscal year...
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...THE APPLICATION OF INNOVATIVE MANAGEMENT ACCOUNTING PRINCIPLES FOR ENHANCING PROFITABILITY AND COMPETITIVENESS: AN EXPLORATORY STUDY OF JAMAICAN MANUFACTURERS Phillip C. James University of Technology, Jamaica College of Business and Management School of Business Administration ABSTRACT This study represents the first in management accounting research in Jamaica which seeks to determine the extent to which innovative management accounting principles (IMAPs) are applied in the manufacturing sector. The aim is to determine if manufacturers in Jamaica are using IMAPs to improve export competitiveness and enhance profitability .The study also seek to determine the factors that prevent manufacturers from adopting these management accounting principles. Five manufacturing organizations were examined using an exploratory case study approach. Results indicate that companies adopting IMAPs have more reliable information for decision making, higher levels of profitability and competitiveness when compared with non- adopting companies. Key Words: Innovative Management Accounting Principles, Profitability, Competitiveness 1. INTRODUCTION The manufacturing environment of the twenty-first century has changed considerably when compared with what existed decades ago. Arising from this development and with the increase in global competition, the need for accurate cost information has become an imperative. Manufacturers worldwide have suddenly realized that the continued...
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...……………………………9-10 Coursework Part 1: Harmonization of international accounting standards Every organization has their own accounting systems and standards. If every organization is preparing its financial reports in their own way, it is difficult for the users of accounting to use the financial reports. (Kirk, & Miller, 1986) Harmonization of international accounting standards as the trend for globalization in business becomes increasingly important for economic success, many issues arise through international business practices for corporations, governments, and investors. There are many potential advantages and disadvantages/challenges associated with harmonization of accounting standards. (John, 2013) Advantages 1) Reduced Reporting Costs Multinationals operating in countries with different accounting standards would incur high costs of preparing financial reports in accordance with each country’s accounting principles, then repeating the whole process for consolidation purposes. Harmonized accounting standards benefits multinational corporations because they can prepare one report rather than one for each country in which they operate. In addition, it enables a systematic review and evaluation of the performance of foreign subsidiaries and associates. (Mark, 2013) 2) Improving Comparability To achieve the comparability against domestic and international peers, harmonization of accounting standards is advocated. Harmonization strives to enhance comparability...
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