By : Joicenda N.

 Accounting provide infomation  to be used in making economic decisions  Decision makers use both qualitative & quantitative information from various sources  Accounting provides quantitative information that is primarily financial in nature

 Linkage between decision makers & Accounting: Information Needs Information Communication  Information is provided by the accountant in the form of reports  The reports are based on collecting and processing data from economic events of the entity Accounting Decision Makers

 Globalization In the age which economy is becoming global, natural, human and financial resources often can be shifted from one part of the world to another part conveniently, efficiently, and at great speed. International Accounting provides pertinent information in decision makers in the age of a global economy, helping them make resources allocation decisions that maximaze the benefit to humankind  Another reason  Another reason ( a student’s prespective ) ????

International Accounting is defined as : Accounting for international transactions, comparisons of accounting principles in different countries, and harmonization of diverse accounting standard worldwide ( Iqbal, 1997 )

Some characteristics of the age of the Global Economy are : 1.International business 2.Blurring Boundaries 3.Dependencies on international trade

The survey which is done by Delloite Touche Tomatsu International informs several reasons for 400 companies in 20 developed countries to get engaging in international operations. They are : a)Growth Opportunities b)Less dependence on domestic economy c)Customer demand d)Lower Costs

The theories which generally support the involvement of a company in international business 1.Theory of Comparative Advantage 2.Imperfect Market Theory 3.Product Cycle Theory 4.Transfer of Technology and Strategic Alliances

International business creates economic interdependencies between countries. This condition increase new significant topics that listed below : 1.Foreign currency transactions 2.Foreign currency translations 3.Taxation of Internal operations 4.Consolidation of financial statements of foreign and affiliaties 5.Multinational transfer pricing 6.Comparative Disclosure requirements

 NAFTA ( The North American Free Trade Agreement )  3 countries: Canada,Mexico, USA + Chile ; Eff: Jan 1, 1994  EU ( European Union )  12 countries of Western Europe; eff ; Jan 1, 1993,  GATT ( General Agreement on Tariffs and Trade ) – ( late 1993 )  The (Asian) Pacific Rim Region : Japan & some other Pasific Rim Countries have emerged as fastest economic region in the world, although they are not rich in natural resources ( The 4 Tigers of Asia, ASEAN )  Asia Pasific Economic Corporation ( APEC )  18 countries, Nov 1993

 The New Topics above create new challenges for accountant in facing International accounting. Those are : a)Skills and competencies of accountants b)Understanding the cross-functional linkages c)Financial analysis and comparability d)Global Information system development

FFive Major environmental influences on Accounting : 1)Economic System 2)Political System 3)Legal System 4)Educational system 5)Religion

A. Trading Blocs B. International Governmental Organizations C. Professional Organizations D. Global Capital Markets E. Multinational Corporations F. Technological Advantages G. Worlwide Political Developments and Trends H. Management Accounting – relevance regained

1.Iqbal, M. Zafar ; Melcher Trini U. dan Elmallah, Amin A., 1997, International Accounting, A Global Prespective. International Thompson Publishing 2.Heti Triaswati, Arif Wasisto dan Mahfud Sholihin, Akuntansi Internasional, Edisi 2005/2006. BPFE Yogyakarta