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International Accounting
International Accounting
International Accounting
com semester 4
Presented By Ashish Siddiqui, Assistant professor, Sanskriti School of Business, AICTE Approved
compiled by Ashish Siddiqui, MBA
Introduction
Most accounting students are familiar with financial accounting and managerial accounting, but many have only a vague idea of what international accounting is. Defined broadly, the accounting in international accounting encompasses the functional areas of financial accounting, managerial accounting, auditing, taxation, and accounting information systems. The word international in international accounting can be defined at three different levels.1 The first level is supranational accounting, which denotes standards, guidelines, and rules of accounting, auditing, and taxation issued by supranational organizations. Such organizations include the United Nations, the Organization for Economic Cooperation and Development, and the International Federation of Accountants
Introduction cont..
At the second level, The company level, international accounting can be viewed in terms of the standards, guidelines, and practices that a company follows related to its international business activities and foreign investments. These would include standards for accounting for transactions denominated in a foreign currency and techniques for evaluating the performance of foreign operations At the third and broadest level, international accounting can be viewed as the study of the standards, guidelines, and rules of accounting, auditing, and taxation that exist within each country as well as comparison of those items across countries. Examples would be cross-country comparisons of (1) rules related to the financial reporting of plant, property, and equipment; (2) income and other tax rates; and (3) the requirements for becoming a member of the national accounting profession.
compiled by Ashish Siddiqui, MBA
Emergence of globalization, growth of multinational corporation, development of world trade, Internationalization of capital markets, Expansion of European union All these have emphasized the importance of International accounting recent years. Emergence of MNC: Emergence of MNC on the international scne is one of the most important factors that has increased importance of international accounting. MNC contribution is 1/3rd of the world exports and also the contribution to the world GDP is Approx 10 %.. The efforts that accountant has to put in preparing consolidation of financial statements if accounts all around the world are prepared on uniform basis. Development of world trade: In recent times international trade has increased to enormous figure and these lead to setting the transfer pricing for sale or transfer of raw materials between two international units
compiled by Ashish Siddiqui, MBA