1. International Accounting

2. An International Perspective on Financial & Managerial Accounting Impact of Accounting Differences History and Background Environmental Factors Classification of Approaches Representative Accounting Issues

3. Impact of Accounting Differences Quality of External and Internal Decision Making Assessment of Competitors and International Opportunities Foreign Investment & Access to Capital Global Privatization

4. Accounting Development: Background Earliest References @ 3500 BC. The Crusades & International Trade 14th C. Italy: –Double Entry Accounting –Fr. Luca Pacioli Antecedents –Writing/Arithmetic/Money/Private Property/ Partnerships/Credit/Capital Accumulation

5. Accounting Development: Background Migration –Italy Spain Portugal France England International Trade & Operations –16th & 17th C. Colonialism Industrial Revolution –From Proprietor to Partnership to Limited Liability Corp to Large Stock Company –Massive Capital Requirements for RRs & Canals

6. Factors Affecting Accounting Development Culture International Political & Economic Ties Economic/Political/Legal Systems Relationship between business & providers of capital

7. Environmental Factors: Culture Educational –Literacy –Secondary & Higher education –Vocational & Technical Training Social –Conservatism –Secrecy/Distrust –Religion based principles –Fatalism

8. Environmental Factors Economic/Political/Legal –Level of Development –Agricultural/Industrial/Service –International Ties –Inflation –Individual Freedom/Government Control –Property Ownership –Code vs. Common Law

9. International Political & Economic Ties Colonial Relationships –British Commonwealth –France –Holland –Spain –Soviet Union Other Relationships –European Union –NAFTA –ASEAN –South America

10. Business & Providers of Capital Investors & Creditors –Few or Many –Who are they? –Relationship between Management & Investors/Creditors Capital Markets –Stock & Bond market development & sophistication –Use of International financial markets

11. Accounting Approaches Macro-Economic: Accounting regarded as a tool to further national economic objectives determined & promulgated by government –accounting information & reports serve the government’s objectives –law & taxes specify framework for reporting –compliance & tax accounting dominate –uniformity supersedes judgment Sweden/Germany/Italy/France/Belgium/Spain/Japan

12. Accounting Approaches Micro-economic: Economy & Nation Prosper as Individual Enterprises & Companies Prosper –accounting information & reports assess the performance & efficiency of the enterprise –economic theory & pragmatism provide the framework for reporting –law encourages sound business practices –accountants & auditors use “best judgment” to assess & report Netherlands/UK/US/Canada/Mexico

13. Accounting Clusters British/American –Oriented toward decision needs of investors & creditors –non legalistic, “substance over form” Continental –designed to satisfy government imposed requirements –legalistic & conservative South American –similar to Continental + “inflation” Mixed Economy –combination of central planning & market economy International Standards

14. International Accounting Issues Consolidations & Currency Gains & Losses Mergers & Acquisitions Capitalization –R&D/Fixed Assets/Leases/Goodwill Inventory & Reserves Pension & Health Care Liabilities Taxes Performance Measurement Systems Auditing