AKUNTANSI INTERNASIONAL

CHAPTER I: INTRODUCTION

ASEP SURYADI

20208200

4EB11

Ø INTERNATIONAL SIGNIFICANT ACCOUNTING DIFFERENCES WITH OTHER

International accounting is considered as a universal system that can be applied in all countries. With the development of business and financial markets that have a lot to internationalization, as well as differences in international accounting is becoming more important from the standpoint of international financial statement analysis. International accounting differences bring a number of problems from the standpoint of financial analysis.

First, in an effort to assess foreign companies, there is a tendency to look at revenues and other financial data from the standpoint of their home country, and because of the danger of ignoring the effects of accounting differences. Unless significant difference was taken into account, possibly with some involvement of a restatement, it may have very serious consequences.

Secondly, awareness of international differences suggest the need to become familiar with generally accepted accounting principles as a destination for foreign countries to know better income data in the context of measurement.

Third, the issue of comparable properties and the harmonization of accounting is reviewed in the context of alternative investment opportunities.

Differences that arise due to:

1. Economic growth,

2. Inflation,

3. Political system,

4. Education,

5. Accounting profession,

6. Tax laws,

7. Money market, and

8. Capital.

Major Differences in Accounting Principles in the Whole World

The existence of accounting differences across the world are no doubt significant enough to make the work of financial analysts is very difficult in a period of making international comparisons.

Ø INTERNATIONAL ACCOUNTING IS DIVIDED INTO THREE BROAD AREAS WHICH

In the international accounting is divided into three broad areas, Accounting includes several extensive process include:

1. Measurement

Can provide in-depth feedback on the probability of a company's operations and financial position of strength. The process of identifying, classifying and counting activities and transactions, to provide input regarding the profitability and operating depth.

2. Disclosure

The process by which accounting measurement is communicated to the users of financial statements and used in decision making or process of communicating to the user.

3. Auditing

The process by which the special accounting professionals (auditors) perform attestation (testing) on reliability of measurement and communication processes.

Ø HISTORY OF INTERNATIONAL ACCOUNTING

At first, beginning with the accounting system of double-entry (double entry bookkeeping) in Italy in the 14th century and 15. Double entry bookkeeping (double entry bookkeeping), considered the beginning of the creation of accounting. Modern accounting started in double entry accounting was found and used in business activity, namely the multiple listing system (double entry bookkeeping) Luca introduced by pacioli (in 1447).

Double entry bookkeeping (double entry bookkeeping) is a standard practice of recording financial transactions. Bookkeeping process only involves recording transactions in a variety of journals and books giving estimates of the classification code (in the collection of raw financial data), which became the basis for the accounting systems that collect and organize raw data into useful information.

Luca Pacioli was born in Italy in 1447; he was not an accountant but the priest who is an expert mathematician, and lecturer at several universities in Italy. Luca who first published the basic principles of double accounting system in his book: the Arithmetica geometria proportioni Summa ET proportionalita in 1494. However many historians argue that the basic principles of double accounting system is not a pure idea Luca but he only summarizes the accounting practices that took place at the time and publish it. It is recognized by the Lica (Radebaugh, 1998).

Business practices with the reference method Venetian Luca wrote the book has become the method adopted not only in Italy but almost all the countries of Europe such as German, Dutch, and English.

Dutch accounting in the accounting model to export such as Indonesia, the accounting system in the French Polynesian and African territories under French rule. Reporting framework of the German system is influential in Japan, Sweden, and Russian empires. Half of the 20th century, as growing economic power of the United States, the complexity of accounting issues arise simultaneously. Then accounting is recognized as a separate academic discipline. After World War II, the accounting impact increasingly felt in the western world. Accounting is supported by the development of education (the emergence of business schools), as times change and the development of international relations, the hassle of getting into accounting.

Contemporary point of view

The existence of a number of additional factors that add to the importance of studying international accounting. These factors are derived from the reduction of significant and persistent barriers to trade and control of the national capital that has occurred over the progress of information technology.

Some of this perspective includes:

1. Any attempt to reduce international accounting differences

2. National controls on capital flows

3. Foreign exchange

4. Foreign direct investment

5. The liberalization of the transaction

6. Privatization of government enterprises (for the reduction of foreign exchange controls and restrictions on cross-border investment)

7. Advances in information technology

The concept of comparative accounting or international accounting to international accounting point of the study and understanding of national differences in the accounting. This includes:

1. Awareness of international diversity in corporate accounting and reporting practices.

2. Understanding of the principles and accounting practices of each country.

3. Ability to assess the impact of the diversity of accounting practices in financial reporting.

The emergence of a new paradigm in the international accounting framework and expand the idea to incorporate new ideas of international accounting. As a result, appeared to be a very long list of concepts and theories created by Amenkhienan accounting to include the following:

1. Universal theory or world

2. The theory of multinational

3. The theory of comparative

4. Theory of international transactions

5. Translation theory

Each of the above theories provide the basis for the development of a conceptual framework for international accounting. Although there will be arguments about what the theory would be preferred.

Iqbal, Melcher and Elmallah (1997: 18) defines an international accounting as the accounting for transactions between countries, comparisons of accounting principles in the country - different countries and harmonization of accounting standards around the world.

A company became involved with the international accounting is when getting the chance to export or import transactions. Export is defined as sales to overseas and domestic seller begins when companies get a firm purchase orders from foreign buyers. Difficulties - difficulties began to arise when the domestic firm to conduct an investigation into the feasibility of foreign acquirers.

If the buyers are requested to provide financial information relating to the company, there is the possibility that financial information is not easily interpreted, given the assumptions and procedures of accounting, unusual in the selling firm. Most companies are just starting out in international business can have recourse to the bank or accounting firm with international expertise to analyze and interpret the financial information.

Ø FINANCIAL SECTOR POLICY NATIONAL TREND

Policy changes in the financial sector is also a demand for high cost of the current financial policy must also be paid to the low economic performance of the real sector. Without policy changes in the financial sector, real sector performance in 2011 there will be no significant improvement when compared to 2010. In fact, as the last six years, in 2010 economic growth in three main sectors, namely agriculture, mining, and processing, which became the main economic activities to absorb 52% of the population and employment grew only 3.5%, far below the economic growth.

Slow performance of the real sector impact on the inability to provide sufficient jobs to hamper the completion of a serious unemployment problem. Indeed, the open unemployment rate declined in 2010. However, the number of underemployed people was 32.8 million. Meanwhile, the BPS data show that of 12.2 million jobs created, 41% of whom are business service organizations (including political organizations, service repair, cleaning, laundry, etc.), rather than on sectors that will drive productivity and high added value.

Poor performance in job creation would be more difficult for eradicating poverty. Indeed, the poverty rate has dropped to 13.3% this year and 11.5% -12% target by 2011 is likely to be reached. However, the reduced number of people who are below the poverty line is only about 1.5 million people is not worth the eradication of extreme poverty budget of only Rp66 trillion (2009) to Rp94 trillion (2010). In 2011, Indonesia will face a food crisis and the energy world. Climate change will reduce the supply of food, especially rice on world markets. Liberalization of food and lack of role of government since the crisis proved to result in food prices increasingly hard to reach communities.

Therefore, breakthroughs are being made to encourage the performance of the state budget is not simply pushing a faster rate and higher realization. However, should the political changes in the budget so the budget is not just a collection of allocation of funds to stimulate economic growth. However, also as a political tool to maintain the level of social welfare by making changes in priorities.

Ø THE ROLE OF ACCOUNTING AND BUSINESS IN GLOBAL CAPITAL MARKETS

In the era of globalization, businesses and communities have become increasingly complex so requires the development of a variety of disciplines including Accounting. Accounting plays an important role in the economic and social as any financial decisions should be based on accounting information. This situation makes accounting as a profession that is needed existence within business organizations.

The business world faster and faster and very varied. Areas that were not of the thought as the business sector is now a major sector. The development of the accounting profession to rise even more after 1985, Bebarengan with the JSE. Bank high interest rates encourage people to find alternatives to meet its capital requirements, increasing competition among companies to be accompanied various problems faced by companies in Indonesia. In the face of all the managers of the company was in dire need of accounting information in decision-making framework.

Accounting has developed very rapidly in line with business growth and development of securities, especially shares in the capital markets business. The American public already knows the business since 1900 (Belkaoui, 2007). In the transaction, both the investors and prospective investors have been using the company's financial information as one of the guidelines in making predictions and for making business decisions, the investment in securities, particularly stocks. Positive developments are happening to the stock business in the U.S. capital markets also showed that companies will need capital also increased in step with market developments. This development also shows that capital markets play an important role in the economy of a country, especially the United States in that era. In addition, it also means that the needs and role of accounting information becomes increasingly important. Indonesia's economic downturn caused by the 1997 economic crisis pushed John Naisbitt predicted that Indonesia will become one of the tigers of Asia. In 2000, three years after the crisis, at a time when other countries are also affected by the crisis such as Thailand, South Korea, the Philippines and Malaysia have obtained a significant improvement of the economy, Indonesia's economy (GDP) grew only 0.2%. (Asian Recovery Information Center - ADB: May 2000) Tanri Abeng (1999) in Djalil (2000), states that there are six basic root of the problem that causes slow improvement in Indonesia's economy, namely:

1. It turned out that the rapid growth of Indonesia before the crisis because it encouraged more investment growth is not due to efficiency and innovation

2. The majority of the market value of listed companies on the JSE was overvalued (90% of the value of publicly traded companies is determined by the growth expectation, only 10% above the real ability to earn profits; different from developed countries, 30% growth expectation, 70% of real ability)

3. Company's financial structure is not healthy (loans over 100% compared to its equity, healthy company should be below 50% of ekuitinya)

4. The existence of mark-up in lending.

5. Unhealthy concentrations of economic (economic pyramid, above: there are 200 private conglomerate owned by 50 families, were: almost empty.

6. There is no good governance (the lowest according to McKinsey 1999)

On the other hand, Indonesia faced economic challenges of the 21st century that economic globalization. Economic globalization is a process of economic activity and trade, in which countries around the world into one market power is increasingly integrated with the territorial limits of the state without a hitch.

Challenges in the Global Era

Globalization that has been faced by the nation of Indonesia would insist on efficiency and competitiveness in the business world. In intraregional relations concerning globalization and international competition will occur between nations. Tangible manifestation of economic globalization faced by Indonesian, among others, occur in the following forms (Damanhuri, 2003):

• Financing. Global companies have access to loans or investments (whether in the form of direct or portfolio) in all countries in the world. For example, in multiplying a unit of PT Telkom telephone line, or PT Jasa Marga to expand the highway network has been utilizing the system of financing by the pattern of BOT (build-operate-transfer) with partner buisiness from abroad.

• Labor. Global companies will be able to utilize the labor of the world according to its class, such as the use of professional staff drawn from workers who have had international experience and or workers from developing countries. With the globalization of human movement will be more easy and free.

• Network information. Society of a country easily and quickly obtain information from the countries of the world due to technological advances, including through: TV, radio, print media and others. With increasingly advanced communications network that has helped to spread to different parts of the world market for the same. For example, KFC, Hoka Hoka Bento, Mac Donald, etc. hit markets everywhere. As a result, the taste of the world (both those residing in cities and villages) to the global tastes.

• Trade. This is manifested in the form of tariff reduction and harmonization and elimination of non tariff barriers. Thus the activities of trade and competition is becoming increasingly stringent and fair. In fact, the transaction becomes faster because of "less papers / documents" in the trade, but can use the telecommunications networks that increasingly sophisticated technology.

With the business activities of the corporation (corporate business) of the above can be said that globalization leads to increasing economic interdependence between countries through increased volume and diversity of transactions between countries (cross-border transactions) in the form of goods and services, international financial flows (international capital flows), the movement of labor labor (human movement) and the rapid spread of information technology. Global economic power led to a business corporation to conduct a review of the structure and business strategy and management bases its strategy on the basis of entrepreneurship, cost efficiency and competitive advantages. Problems of competitiveness in an increasingly open world markets is a key issue and challenge, not light. Without the capability and equipped with high competitive advantages necessarily the product of a country, including the products of Indonesia, will not be able to penetrate the international market. Even the entry of imported products could threaten the position of the domestic market. In other words, in a competitive market, competitive advantage (competitive advantage) is a very important factor in improving company performance. Many large corporations Indonesian crashing because of the crisis, as global competition, suggesting that they are not efficient.

Realizing that some big companies do not anticipate trying to be a bubble but a sustainable company (Hasan, 2000). Good corporate governance, good corporate governance, it is believed capable of realizing that desire, because it not only aims to profit-oriented but also focus on the needs of its stakeholders. For that transparency, accountability, fairness, and responsibility is particularly important to understand both the organization and realized private organizations and public sector organizations. Accounting, as an information provider, need to realize that high quality information is the foundation of good corporate governance. Therefore accounting principals need to be aware of their responsibilities to provide information and financial statements are reliable and accurate