Different Kind of Accounting

 

From<Principles of Persuasion>

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Different Kind of Accounting

1. Diversity in Accounting Systems: Accounting standards vary significantly across countries due to factors such as:

   • Relationships between businesses and capital providers: Different stakeholders (e.g., banks, investors, governments) influence accounting practices.
   • Political and economic ties: Historical influences, like the Philippines adopting U.S. accounting methods as a former protectorate, affect systems.
   • Inflation: Host country inflation impacts the evaluation of subsidiary performance and consolidated balance sheets.
   • Development levels: Countries with less-developed accounting standards and limited professional training face challenges in implementation.
   • Cultural factors: Resistance to change (uncertainty avoidance) shapes a country’s accounting standards.

2. Government's Role in Accounting: Governments influence accounting systems differently based on their economic orientation:

   • Capitalist vs. Socialist Systems: The U.S. (capitalist, free enterprise) contrasts with France (quasi-socialist, state-influenced enterprises).
   • Convergence of Standards: The EU’s adoption of IASB standards and their relationship to FASB in the U.S. reflects a gradual convergence of accounting practices.

3. Cultural Impact: Cultural values, such as stoicism in Japan (prioritizing collective over personal ambition), contrast with the U.S.’s individualistic, resource-driven tendencies, influencing national accounting approaches.