“All over the world, different countries vary in their general accounting procedures since each nation has its own financial framework. Although there had been an agreed GAAP – Generally Accepted Accounting Procedures, each country requires a
certain type of financial reporting from accountants. Some countries follow GAAP but more developed countries prefer International Accounting standards (IAS).Each country has a unique political and social climate which affects the government. The government is mainly responsible for issuing regulatory policies that would provide guidelines for accounting reports and practices.
International accounting exists because the financial transactions of a developed country is more complicated than that of developing nations. Some set of information for one country may not be relevant or applicable in another country’s finances. For example, Japan has developed an intricate accounting framework that is not easily understood by accounting practitioners from some parts of the world. History may also influence the accounting procedures of a nation as countries like US adopted some of its practices from Germany as a result of the war.
Nevertheless, there is a need for countries to have a clear guideline for accounting reports that is why the International Accounting Standards have been established. The IAS contains a set of standards that states how some accounting transactions should be reported and reflected in financial statements. This helps companies such as multi-nationals and trans- nationals that deals with different countries for their products to consolidate different types of accounting reports. Also, countries that meet and discuss business regulations can establish and analyze financial transactions coming from one point.
The IAS was formerly issued by the Board of the International Accounting Standards Committee (IASC). Later on, a more updated set of standards was released in 2001 and this is now recognized as the international financial reporting standards. It must be emphasized that IASC provides guidelines for its member countries but cannot impose members to comply with the set standards. It is just an agreement between countries to report in accordance to what has been set by IAS for publicly-traded companies.
A better understanding of international accounting can gained by reading books that covers introduction to international accounting. By reading such books, one is guided properly in learning why countries differ in accounting practices and the extent of government regulations in establishing financial reports. International accounting standards and its benefits over GAAP is also explained so readers can compare the advantages of both procedures.”