8 March 2011
TUGAS SOFTSKILL AKUNTANSI INTERNASIONAL (translete)
I will discuss here there are two points, namely:
(1) Factors affecting the development of the accounting world, and
(2) The basis for the classification of the International Accounting
source that I got it from an international accounting books by various authors are different.
from the first book, INTERNATIONAL ACCOUNTING quoted from the book, written by Drs. Eko Suwardi, M.Sc. Lecturer Faculty of Economics, University of Gadjah Mada, Yogyakarta .. which i’m take outlines is:
1. CLASSIFICATION OF ACCOUNTING AND REPORTING SYSTEM
There are 2 approaches to the classification of accounting systems, namely:
- Deductive approach
Related to this deductive approach there are four approaches in the development of accounting:
1. Macroeconomic Pattern
In this approach can be seen that apparently accounting for the business is closely linked to national economic policy. The purpose companies typically follow the national economic policy. Some States are using this approach is Swedish, French, and German.
2. Microeconomic Pattern
In this approach to accounting is seen as a branch of businesseconomics. The concept of accounting is derivation of economic analysis. The main concept is to maintain capital investment in abusiness entity.
3. Discipline Independent Approach
Accounting is seen as a service function and the derivation of his business practices. American countries and the United Kingdom adopted this approach.
4. Uniform Accounting Approach
Accounting is seen as an efficient tool for the administration and control. In this case the accounting used for ease of use and good uniformity of measurement, disclosure and presentation as well as a means of control for all types of businesses and users, including managers, government and tax authorities.
Classification by G. G. Mueller, published in The International Journal of Accounting (Spring 1968) which uses the assessment of economic development, the complexity of business, political and social situation of the legal system, dividing countries into 10 groups based on the accounting system are:
1. United States / Canada / Netherlands
2. British Commonwealth Countries
3. Germany / Japan
4. Mainland Europe (Not including West Germany, the Netherlands and Scandinavia)
6. Israel / Mexico
7. South America
8. Developing Countries
9. Africa (excluding South Africa)
10. Communist Countries
- Inductive Approach
While Nair and Frank in The Accounting Review (July 1980) divide countries into 5 major Group: (1) model of the British Commonwealth, (2)model of Latin America / South Europe, (3)model of Northern and Central Europe, (4 ) model of the UnitedStates and (5) Chile based on the difference in the practice of disclosure and presentation. Nair and Frank also assess the level of grouping relations with these countries a number of variable ssuch as language, economic structure and trade. Apparently there are differences between the disclosure and measurement in each group that State.
While Nobes in the Journal of Business Finance and Accounting(Spring 1983) identify the factors that distinguish the accounting system are:
1. Type the published financial statement users.
2. The level of legal certainty.
3. Tax rules in the measurement.
4. Level of conservatism.
5. Level of rigor in the application of historical cost.
6. Adjustment of replacement cost.
7. Practice statements.
8. The ability to obtain provisions.
9. Uniformity between companies in applying the rules.
Culture and historical roots of a State is the first step to identify the factors that influence the accounting. Culture is an important element that should be considered to find out how a social system changed Karen “the influence of culture, namely: (1) a system of norms and values and (2) group behavior in their interactions within and outside the system.”
Hofstede tried to examine the structural elements of a strong cultural influence behavior in situations of organizations and institutions. There are 4 dimensions identified are:
1. Individualism vs. Collectivism
Individualism is the tendency of the relatively free social functionand individual means the only care of themselves and their families. In contrast, collectivism is the tendency of social functions that relatively strict in which each individual identifies themselvesas a group with a loyalty that does not need to be asked. The main problem of this dimension is the level of interdependence of individuals within a society.
2. Small vs. Large Power Distance
Power Distance is the extent to which members receive power ininstitutions and organizations is not evenly distributed. People in Small Power Distance requires equality of power and justification for the welfare not of power. People in Large Power Distance receive command hierarchy in which each person has a place without the necessary justification anymore. Problems utaman this dimension is how a society handles inequalities among people when it happens.
Uncertainly Avoidance is the degree to which members of society feel uncomfortable with uncertainty and doubts. Strong Uncertainly Avoidance trying to maintain a society that is so great confidenceand less tolerant of people or alternative ideas. In contrast to weak Uncertainly Avoidance. The main theme on this dimension is how acommunity reaction to the fact that time only runs one direction andthe future is unknown, and whether to try to control the future orleave it.
4. Masculine vs. feminine
Masculine in a society which tends to give parameters to thefamily, Heroism and material successes. Instead, feminism tend topersonal relationships, tolerant of the weaknesses and the quality of life. The main theme on this dimension is how society provide ssocial roles related to gender issues.
1. Professionalism versus Statutory Control
Ability to perform judgment profesionalis individually and try to maintain an independent professional regulatory compliance contrasted with legal requirements and statutory control.
2. Flexibility vs. uniformity
The tendency to perform a uniform accounting practices and consistent between companies compared with the level of flexibility to apply the practices adapted to the conditions of a company.
3. Conservatism versus Optimism
The tendency of people to be wary of a current level of risk anduncertainty in the future compared with a more optimistic attitude and courage to take risks.
4. Secrecery vs. Transparency
The tendency to make disclosure of information about business restrictions only on the parties involved intense with the management and finances compared with a more transparent andopen.
Why do we need to know how and why accounting evolved? The answer is the same as why studying developments in other fields. We will be able to better understand the accounting system of aState to know the basic factors that hamper its development. Accounting course differ from one place to another around the world and the development of knowledge about factors help tounderstand why it happened. In other words, the visible differences and similarities can be explained by these factors. Therefore, accounting react to their environment, cultural environment, economy, law and politics of different produce a similar system as well.
Accounting standards and practices in each country is the result ofcomplex interactions between economic, historical, institutional and cultural. Can be expected that there would be differences between countries. Factors that influence the development of national accounting can also help explain differences in accounting between nations.
We believe that the following 8 factors that influence seignifican in the development of accounting. Seven main factors of economic, social history, and / or institutional and be an factor that is often mentioned by the authors of accounting. Lately, the relationship between culture (following eight factors) and accounting developments began explored further.
In countries with strong equity markets, such as the United States and Britain, accounting has the focus or how well the management run the company (profitability) and is designed to help investors analyze the cash flows associated risk depandan. Disclosures made very complete to comply with broad public ownership. In contrast, in credit-based system in which the bank is the main source of funding, accounting has focused on creditor protection through the accounting measurement is conservative in minimizing the payment of dividends and maintain sufficient funding within the framework of protection for borrowers. Because financial institutions have direct access to what information you want, extensive public disclosure deemed unnecessary. Examples are Japan and Switzerland.
The legal system determines how individuals and institutions interact. The West has two basic orientations: codification of law(civil) and common law (case). The main legal codification is taken from Roman law dank Napoleonic ode. In countries that adopts a Latin-Roman legal codification, the law is a complete group that includes provisions and procedures. Codification of accounting standards and procedures are reasonable and appropriate there. Thus, in countries that adhere to codified law, accounting rules are incorporated in national law and tend to be very comprehensive and includes many procedures. In contrast, common law developed on the basis of case by case basis without any attemptto cover all cases in the complete code. Of course, there are basic laws, but tend not to be too detailed and more flexible when compared with the general codification system.This encourages efforts to try and enable the implementation considerations. Common law derived from English case law. In most common law countries, accounting rules set by private sector professional organizations. This allows the accounting rules become more adaptive and innovative. Except for the provisions of the broad base, most of the accounting rules are not incorporated directly into the basic law. Codification of law (legal codes) tend tostare at the contents (contents) economy. For example, the lease under the common law rule is usually not capitalized. Conversely,the lease under the general law can basically capitalized if it becomes part of the property buyer.
In most countries, tax rules effectively set of accounting standards because the company should record revenue and expenses in their accounts to claim the tax purposes. In other words, financial and tax accounting tax is the same. In this case, as an example is the casein Germany and Sweden. In other countries like the Netherlands, different financial accounting and tax: taxable income is essentially a financial accounting profit adjusted for differences in tax law. Of course, when separate financial and tax accounting, tax rules sometimes require the application of certain accounting principles.Valuation of inventories according to First Go Last Exit (the last-in,first-out-LIFO) in the United States is an example.
Ideas and accounting technology transferred through conquest, trade and similar strength. The recording system in pairs(double-entry) that originated in Italy in the 1400s gradually become widespread in Europe in conjunction with reform ideas(rannaissance) others. British colonialism exporting accountants and accounting concepts throughout British dominions. German occupation during World War II led to the French Plan Comptableapply. United States forced the U.S. style accounting regulatory regime in Japan after the end of World War II. Many developing countries use an accounting system that was developed else where, either because imposed upon these countries (likeIndia) or because of their own choice (such as Eastern European countries are now imitating the accounting system according to the rules of the European Union (EU).
Inflation obscures the historical cost accounting through excessive reduction of asset values and related expenses, while on the other hand increased its excess of revenue. Countries with high inflation often require companies to do a variety of price changes into their financial calculations. Mexico and several South American countries using accounting generic level because of their experience with hyperinflation. In the late 1970s, in connection with an inflation rate that is not usually high, the U.S. and Britain are experimenting with reporting the effect of price changes.
These factors influence the types of business transactions carried out in an economy and determine what the most important. In turn, this type of transaction determines the accounting issues faced. For example, stock-based compensation for corporate executivesor securitization of assets is something that rarely happens in economies with less developed capital market. Currently, many industrial economy became service economy. Accounting issues such as valuation and recording of depreciation of fixed assets arehighly relevant in the manufacturing sector became increasingly less important. The challenges of new accounting, such as valuation of intangible assets and human resources is growing.
Here, culture means the values and behaviors shared by a society. Cultural variables underlying institutional arrangements in a country (such as legal systems). Underlying Hofstede’s four dimensions of national culture (social value): (1) individualism, (2) power distance, (3) uncertainty avoidance, and (4) masculinity. The analysis is done based on data derived from the employees of a large multinational company from the United States operating in 40 different countries.
International accounting classifications can be made in two categories: with consideration and empirically. Classification by considerations depend on knowledge, intuition, and experience. Classification empirically using statistical methods to collect database accounting principles and practices worldwide.
Four approaches to the development of accounting
Initial classification was proposed by Mueller mid-1960s. He identified four approaches to accounting development in Western countries with market-oriented economic system.