AKUNTANSI INTERNASIONAL

CHAPTER III: COMPARATIVE ACCOUNTING

ASEP SURYADI

20208200

4EB11

Ø TERMS OF ACCOUNTINGS STANDARDS AND STANDARD SETTING

Accounting standards are the foundation or the instructions for them to practice or activities in the fields of accounting, financial statements that is more useful and not misleading. This is made clear by the Indonesia Institute of Accountancy in Financial Accounting Standards (IFRSs) as the principal guidelines for the preparation and presentation of financial statements for companies, pension funds and other economic units is very important, so that the financial statements more useful, understandable and comparable, and not misleading.

Therefore, the accounting standard is a guideline that must be adhered to for those who conduct activities in the fields of accounting, in the context of preparing the financial statements. But keep in mind that the Financial Accounting Standards as a guideline to follow the habit is certainly not the guidelines that are applicable universally and absolutely appropriate circumstances, time and place. Financial Accounting Standards in development not apart of the influence of other factors, such as the views of experts in the fields of accounting, political and economic developments, government regulations and other factors. Thus, it is necessary to know of the Accounting Standards are guidelines and instructions whether that can be provided by the Accounting Standards? Accounting standards can provide clues about how do the economic resources of the resulting recorded as "treasure" and "obligation". When a change in the assets and liabilities is how do I write them down, when the change is recorded and how do I measure it, what information should be disclosed and how to express it, and so on. Guidelines and instructions can be encountered in the book "Financial Accounting Standards", issued by the Accounting ties Indonesia (IAI). International Accounting Standards Committee (IASC) in the Financial Accounting Standards explains that:

". . . Accounting Standards and procedures relating to the preparation and presentation of financial statements. It Believes that further harmonization best can best be pursued by focusing on the financial statements are prepared That for the purpose of Providing That is useful information in making economic decisions ".

According to Prof. Haim Falk explained that there are four advantages to using international accounting standards:

1. With regard to reconciliation of interests - special interests of managers - managers who are responsible for financial reporting and the needs of users of financial information

2. The limited capacity of financial information for interpolating recipient of such information appropriately

3. The overall credibility of financial reporting process and the accounting profession to support it

4. Because of the comparative financial information is disclosed is an argument relating to the above point

Ø DETERMINATION OF ACCOUNTING STANDARDS

Standards in determining objectives

(1) Determination of the standard is that a social choice standard may benefit a particular party and harm others. Most of the issues relating to accounting politically sensitive due to:

a. The need for accounting standards appears when there is disagreement

b. Accounting information can affect the level of welfare use.

(2) In determining the standard there are two approaches, namely:

a. Representative faithfulness, this approach requires that the reporting is neutral and fair presentation of financial statements through the process of setting standards. This approach to accounting equates with the mapping process which maps should be accurate to describe the company's financial condition is fair.

b. Economic Consequences, this approach requires a standard adopt have favorable economic consequences. This approach tends to lead to the determination of standards have positive influence.

Ø INTERNATIONAL ACCOUNTING HARMONIZATION

Harmonization is a process to improve the compatibility (suitability) practice accounting with the limits - limits how much the practice - the practice may vary. Harmonization of standards will be free of conflicts of logic and Data increase comparability of financial information derived from various countries.

Terms of harmonization and standardization difference, standardization means that the determination of a group of rigid rules and narrow and may even be the application of a single standard or rule in any situation.

Application of international standards in accounting is voluntary and depends, to be accepted, on the goodwill of those who use the accounting standards. The easiest situation would arise when an international standard is only an imitation of the national standard. When the national and international standards differ from one another practice that exists today is to favor the national standard.

Arguments supporting the accounting standards

Parties who want the regulation will use the theory of public interest (The Public Interest Theory) and the theory of interest groups (The Interest Group Theory) desire to succeed because in essence, both market failure and the need to achieve social goals to force the accounting regulations (Scott, 2000).

Theory of public interest

Public interest theory states that the regulation occurs because of public demand and appears as a correction of market failures. Market failure occurs because of the allocation information is not optimal and this can be caused by (1) reluctance of companies to disclose information, (2) the misuse of information, and (3) the presentation of accounting information improperly. In this theory, also called the central authority and the regulator is assumed that people have the greatest importance on accounting information. Regulator seeks to make arrangements with the best as it will maximize social welfare. In practice the theory of public interest appeared to have a problem with that theory is said to have implementation problems because it is difficult to determine how much regulation is appropriate. Determination of the amount of regulation is something that is difficult for commodities such information. More difficult problem lies in the motivation of the regulator itself. It must be realized that it is very difficult to monitor the operation of regulators and the public power to force the regulator to operate in the public interest is weak. Weaknesses will also raise the possibility that the agency will operate for private purposes and not for public use.

Theory of interest groups

The theory of interest groups holds the view that an industry operates because there are a number of interest groups. Political or legislative authority may also be classified as an interest group that has the power to supply to maintain power regulation. Therefore, this theory has the view that regulation is a commodity in which there is a supply and demand. Commodities will be allocated to the constituents with effective political and legislative convincingly provide regulatory relief to him.

Arguments opponents of accounting standards

Parties who do not want regulation argue with agency theory (agency theory) which states that management has an incentive to report reliably and voluntarily presented to the owners (shareholders) solely to resolve the conflict between owners and management. Financial reports used to monitor the employment relationship (agency relationship) and to assess and determine the compensation to be paid to the manager (Belkaoui, 2007).

In addition to using agency theory, the regulations also do not want a free market approach. According to this approach is an accounting of information products that are economical, as well as other goods or services. Accounting information is also subject to the power demand of the users and are provided by the renderer. The result is an optimal amount of information disclosure on the optimal price level as well. When the information is required and a certain price offered for it, then the market will provide the information as long as the price offered exceeds the cost of such information.

Approach in the regulation of the private sector accounting standards

1. Basic assumption that the public interest to be served with good accounting standard setting if left to the private sector.

2. Proponents of this approach using the argument:

3. FASB appear responsive to the various constituencies

4. FASB seem able to attract, as a member or staff, people who have the technical knowledge necessary to develop and implement alternative measurement and disclosure system.

5. FASB seems to be successful in obtaining responses from the various constituencies and in response to a number of inputs.

6. Opponents of this approach using the argument:

7. FASB does not have statutory authority and power to impose rules that make, as well as the challenges faced rejection by Congress or by other government agencies

8. FASB often accused of being independent and major constituents, public accounting firms, and corporations

9. FASB often accused of slow in responding to major issues that is crucial for a number of constituents.

Ø ACCOUNTING STANDARDS OVERLOAD

Accounting Standards Overload is generally associated with growth accounting standards, namely: that too many standards, standards that are too complicated, there are no rigid standards, the general purpose standard that failed to present the differences between the renderer needs, users, and the CPA, general-purpose standard which failed in presenting the differences between public and nonpublic entities, annual and interim financial statements, companies large and small, and the audited financial statements and non-audited, disclosure overload, measurements that are too complex.

1. Accountants can lose its orientation to the real task which is made by the manager. Audit can fail, because accountants can lose focus audit and may forget to perform the basic audit procedures. The number of complex accounting provision may lead to poor adherence to the provisions of the business world, without the approval of the CPA.

2. Solutions Accounting Standards Overload

3. Issuance, taking into account existing reporting standards, financial statements prepared, reviewed, and examined under another comprehensive basis of accounting, including financial statements, based on income tax, can reduce the burden of accounting standards that are too heavy for the small non-public entities.

Ø DIFFERENT FROM THE STANDARD ACCOUNTING PRACTICES PRESCRIBED

In the known existence of financial accounting standards must be followed in making the financial statements. The standard is necessary because of the many users of financial statements, even for a similar financial statements. If there is no standard, the company may present its financial statements at their disposal in accordance with the will of their own. This will be a problem for users because it will make it difficult for them to understand the existing financial statements.

Existing standards for financial accounting standards made by the board in each country. Council is to set standards of accounting standards applicable in the country and used by entities that exist in the country as well. Because the accounting standards prepared and compiled by each board of standards in each country, accounting standards from country to country may differ greatly.

Currently, when the business world can be said almost without limit state, the production of resources (eg money) that is owned by an investor in a particular country can be moved easily and quickly into the country through mechanisms such as the stock market. Of course there will be a problem when the accounting standards used in different countries with the accounting standards used in other countries. Investors and potential investors and creditors and potential creditors will have great difficulty in understanding the financial statements are presented with different standards.

Harmonization is a process to improve the compatibility (suitability) accounting practices by setting limits on how large these practices may vary. Harmonization of standards will be free of conflicts of logic and can improve the comparability (comparability) of financial information from different countries.

Efforts to harmonize accounting standards have been started long before the establishment of the International Accounting Standards Committee in 1973. More recently, a number of companies seeking to raise capital in markets outside the country of origin and the investors who seek to diversify their investments internationally face increasing problems as a result of national differences in terms of accounting, disclosure, and audit.

Sometimes people use the term harmonization and standardization as if both have the same meaning. However, contrary to the harmonization, standardization generally means the determination of a group of rigid rules and narrow and may even be the application of a single standard or rule in any situation. Standardization does not accommodate the differences between countries, and therefore more difficult to implemented internationally. Harmonization is much more flexible and open, do not use one size fits all approach, but to accommodate some of the differences and have experienced great progress internationally in recent years.

Comparability of financial information is a concept that is more clear than harmonize. The information generated from the system of accounting, disclosure and audit different or comparable if it has a similarity in the way in which users can compare the financial statements without the need to familiarize themselves with more than one system.

Ø ACCOUNTING SYSTEMS IN DEVELOPED COUNTRIES

ACCOUNTING SYSTEM IN JAPAN

Accounting and financial reporting in Japan reflects a combination of domestic and international influences. Two separate government agency responsible for the regulation of accounting and corporate income tax law in Japan have more influence as well. In the first half of the 20th century, reflecting the effect of German accounting thought; in the second half, the ideas of the influential U.S.. Lately, the influence of body the International Accounting Standards Board began to be felt and in 2001 major changes occurred with the establishment of private sector organizations as a maker of accounting standards.

Japan is a traditional community with cultural and religious roots are strong. Group consciousness and interdependence in personal relationships and independent firms as opposed to a reasonable relationship between individuals and groups in western countries. The Japanese company has an equity stake together with each other, and often jointly own other companies. These investments are interlocked producing a bigger industry conglomerate called keiretsu. Banks often become part of this large industry group.

The use of bank credit and debt capital to finance the company's expanding fairly large lots when viewed from the perspective of the West and especially the company's management more accountable to the banks and other financial institutions, compared to shareholders. The central government also imposed a strict control over a wide range of business activities in Japan, which means a strong bureaucratic control in matters of business, including accounting. Knowledge of the main business activity is limited to companies and other parties such as banks and the government.

These keiretsu venture capital, is in line with the reform of structural changes in the Japanese to overcome economic stagnation that began in the 1990s. The financial crisis that followed the breakup of the Japanese bubble economy is also pushing for a thorough evaluation of the Japanese financial reporting standards. It is apparent that many accounting practices to hide how bad the company in Japan. A major change in accounting was announced at the end of the 1990s to make the economic health of the Japanese companies become more transparent and bring Japan closer to international standards.

Accounting Regulations and Enforcement Rules

The national government still has the most significant influence on accounting in Japan. Accounting regulation is based on three laws: Commercial Law, Capital Market Law and the Income Tax Law of the Company.

Commercial law is governed by the Ministry of Justice (MOJ). The law is at the core of accounting regulation in Japan and most have a major influence. Developed from German commercial law, a law enacted early in 1980, but was only implemented in 1899. Protection of creditors and shareholders is the main principle with a very clear dependence on the historical cost. Disclosure of credit worthiness and income available for dividend distribution is equally important. Established a company is required to meet the accounting provision, contained in the rules concerning the balance sheet, income statement, statement of business and supporting schedules with company limited liability.

Public-owned enterprises shall further comply with the Capital Market Law (SEL) is regulated by the Ministry of Finance. SEL is based on the Capital Market Law and the U.S. imposed on Japan by the United States during the occupation after World War II. The main purpose of SEL is to provide information in making investment decisions. Although SEL requires the same basic financial statements as commercial law, terminology, form and content of financial statements is defined more specifically by SEL; some postal financial statements reclassified for presentation purposes and additional details are given. However, net income and shareholders' equity remains the same according to the Commercial Law and SEL.

Accounting Business Advisory Council (BADC) is a special advisory body for the finance ministry is responsible for developing accounting standards in accordance with the SEL. BADC can be said is the primary source of GAAP in the State of Japan today. But BADC can not exclude that different standards of commercial law. BADC members appointed by the finance ministry and work part time. They come from academia, government, business circles as well as members of the Institute of Certified Public Accountants in Japan (JICPA).

Major changes in the setting of accounting standards in Japan occurred in the formation 2001dengan Accounting Standards Board of Japan (ASBJ) and the associated regulatory agency known as the Institute for Financial Accounting (FASF). As an independent private sector organization, ASBJ is expected to be stronger and more transparent and less influenced by political pressures and special-purpose, when compared with the BADC. ASBJ working with the IASB in developing IFRS.

Financial Reporting

Company incorporated under commercial law are required to make mandatory reports that must be approved in the annual meeting of shareholders which contains: a balance sheet, income statement report, business reports, proposals for the determination of the use (appropriation) profit in the hold, supporting schedules.

Notes accompanying balance sheet and income statement of accounting policies to explain and provide supporting detail. The report outlines the business operations and information operations, financial position and operating results. A number of supporting schedules shall also be made, apart from the notes to the financial statements, which include:

• Changes in share capital and reserves must

• Changes in bonds and long-term debt and short-term

• Changes in fixed assets and accumulated depreciation

• Assets in insurance

• Loan guarantees

• Changes in provisions

• And the amount owed to the collectible of the controlling shareholder

• Equity holdings in subsidiary companies and the number of shares owned by such subsidiaries.

• Receivables from subsidiaries

• Transactions with directors, the auditor shall, controlling shareholders and third parties that pose a conflict of interest

• Remuneration paid to directors and the auditor shall

This information is compiled for a single year by a parent company and shall be audited by the auditor. Commercial law does not require a cash flow statement.

Company that listed its shares must prepare financial statements in accordance with the Capital Market Law (SEL) which generally requires the same basic financial statements with the commercial law coupled with the cash flow statement. But according to the consolidated financial statements SEL was not primarily the parent company financial statements. Financial statements and schedules are prepared in accordance with the SEL must be audited by independent auditors. Cash flow forecast for the next 6 months included as additional information in the report to the Ministry of Finance. Other forecast reports are also reported. Overall, the number of very large firms reporting forecasts in Japan. However, this information is only reported in the mandatory and rarely presented in the annual report to shareholders.

Accounting Measurement

Commercial law requiring large companies to prepare consolidated reports. Additionally share listed companies must prepare consolidated financial statements in accordance with the SEL. Account is a separate company basis for the consolidated statements and same accounting principles are used for both. Consolidated subsidiary if the parent company directly and indirectly control the financial and operational policies. Although the pooling of interest method is allowed, the purchase method for business combinations commonly used.

Most accounting practices implemented in recent years as a result of the Great Change in Accounting. Recent changes include:

• Requires companies that list their stocks to make a cash flow statement

• Expand the number of subsidiaries are consolidated under the control of owned and not a percentage of ownership

• Expand the number of affiliated companies accounted for under the equity method based on significant influence, and not a percentage of ownership

• Assessing investment in securities of the market price rather than cost

• Full provision for deferred liabilities

• Full accrual for pension and other pension obligations.

ACCOUNTING SYSTEM IN FRANCE

France is a major supporter of national uniformity in the accounting world. Ministry of National Economy approved the General Plan Computable (national accounting code) is the first official in September 1947. In the Year 1986, planned expanded to implement the provisions in the EU Seventh Directive on consolidated financial statements and further revised in 1999. Compatible General Plan contains:

• purposes and principles of accounting financial reporting seta

• definition of assets, liabilities, shareholders equity, revenues and expenses

• rule of recognition and assessment

• standard chart of accounts, provision for its use, and provisions of other books

• sample financial statements and presentation rules.

The special feature is the presence of accounting in France dichotomy between the separate financial statements of companies with the financial statements are consolidated business group. Although the accounts of the separate companies must meet the mandatory reporting provisions, the law allows French companies to follow International Financial Reporting Standards.

Accounting Regulations and Enforcement Rules

Five major organizations involved in standard-setting process in France is:

• Counseil National de la Comptabilite or CNC (National Accounting Board)

• Comite de la Reglemetation Comptable or CRC (Akntansi Regulatory Committee)

• Autorite des Marches financiers or AMF (Financial Markets Authority)

• Ordre des Experts-Comtable or OEC (Association of Public Accountancy)

• Compagnie Nationale des Comptes Commisaires aix or CNCC (Association of National Compliance Auditor)

In France the profession of accounting and auditing have been separated long ago. Accountants and auditors France was represented by two agencies, the OEC and CNCC, although there are a number of people who belong to both. Indeed, 80% of qualified accountants in France have both these classifications. Two professional organizations have close ties and work together for the common good. Both are involved in the development of accounting standards through the CNC and CRC and both of represent France at the IASB

Financial Reporting

French Financial Reporting include:

• Balance

• The income statement

• Notes to the financial statements

• Report of directors

• Auditor's report

Financial statements and all liability company limited liability company with others who beyond a certain size must be audited. Large companies also have to prepare documents related to the prevention of insolvency and corporate social reporting, which are both only available in French.

The main feature of reporting in France is the regulations on the disclosure of extensive footnotes and details that include the following:

• A description of the measurement rules in force

• Accounting treatment for items in foreign currency

• Statement of changes in fixed assets and depreciation

• Detailed provisions

• Details revaluation undertaken

• Analysis of accounts receivable and debt according to maturity

• List of subsidiary companies and shareholdings

• Amount of pension commitments and other post-employment benefits

• Detail the influence of taxes on the financial statements

• The average number of employees in group

• Analysis of revenue by activity and geographic

Accounting measurement

Accountancy in France has a double characteristic: The company must comply with the separate rule fixed, while the consolidation of business groups have the flexibility greater. Accounting for individual firm legal basis for share dividends and compute taxable income.

Payment method (purchase method) is generally used to record the merger, but the pooling of interest method (pooling method) can be used in some circumstances. Goodwill (goodwill) generally capitalized and amortized to earnings, but not determined how long the maximum amortization period. Goodwill does not need to be tested for impairment. Use proportionate consolidation for joint ventures and equity method is used to record investments in companies that are not consolidated, which can be affected significantly. Foreign currency translation practices with IAS 21. Assets and liabilities of subsidiaries with stand-alone translated used closing rate method (late) and inserted into the translation differences in equity.

ACCOUNTING SYSTEM IN NETHERLANDS

Accounting in the Netherlands has some interesting paradox. The Netherlands has the provision of accounting and financial reporting are relatively permissive, but the standards for professionalism is very high. The Netherlands is the country code of law, but accounting-oriented fair presentation. Financial reporting and tax accounting are two separate activities.

Dutch accounting is willing to consider ideas from outside. The Netherlands is one of the first supporters of the international standards for accounting and financial reporting, and the IASB statement received great attention in determining acceptable practice.

Accounting Regulations and Enforcement Rules

Regulation in the Netherlands remained so in 1970 when liberal laws enacted Annual Financial Report, the 1970 Act introduced a mandatory audit. The law also encourages the formation of Accounting Studies Three Parties (Tripaartif) (which was replaced by the Council's Annual Report on the Year 1981)

Annual reporting of the Council issued guidance on acceptable accounting principles (not accepted) in general, the Council has members from three different groups:

• The preparation of financial statements (the company)

• Users of financial statements (union representatives and financial analysts)

• Auditors of financial statements (the Dutch institute or NivRA Registered Accounting)

Financial Reporting

Quality of the Netherlands is very uniform financial reporting, financial statements shall be drawn up in Dutch, but in English, French, and German can be accepted. Financial reports should contain the following:

• Balance

• Statement of Income

• Records

• Report of the Board of Directors

• Other information recommended

Accounting Measurement

The method used is the purchase method, goodwill is the difference between acquisition cost and fair value of purchased assets and liabilities. Dutch flexibility in accounting measurements can be seen with the permissibility of the use of value now for tangible assets such as inventory and assets are depreciated. Because the company a Dutch company has flexibility in applying the rules of measurement, can be presumed that there is a chance to perform smoothing earnings. Certain items can ignore the statements of income and adjusted directly against reserves in shareholders' equity. It includes:

• Catastrophic losses are not possible or is not common for the uninsured

• Similar losses due to nationalization or other confiscation

• Consequence due to financial restructuring

ACCOUNTING SYSTEM IN ENGLAND

English is the first country in the world to develop a system of accounting profession. concept of the presentation of results and financial position of the fair (correct and fair view) also comes from English.

Two main sources of financial accounting standards in the UK is the company's legal and accounting professions. on legislation in 1981 set out five basic principles of accounting. principles are:

1. revenues and expenses should be matched according to the accrual basis.

2. postal assets and liabilities separately in each category of assets, and liabilities are assessed separately.

3. principle of conservatism.

4. application of accounting policies that are consistent from year to year are required.

5. business continuity principles are applied to companies that use accounting.

This legislation also contains the rules of the broader assessment of the accounts which can be determined based on historical cost or current cost.

The measurement of accounting, English allow both methods of recording the acquisition and merger accounting for business combinations. but in 2003, the Department of Trade and Industry announced that beginning January 2005, all companies in the UK are allowed to use IFRS, in addition to GAAP.

ACCOUNTING SYSTEM IN UNITED STATE

United States is a federal republic consisting of 50 states and a federal district. Except Alaska (northern Canada) and Hawaii (Pacific Ocean), 48 other states and federal district located in North America.

U.S. Economy Capitalist system running. Economic growth in this country firmly on the surface, unemployment and low inflation, and lower trade deficit (meaning the U.S. bought more goods from other countries rather than sell).

The U.S. economy is one of the most important thing in the world. Many countries have made the U.S. dollar as the benchmark currency, meaning that valuable or whether their currency is determined by the dollar. Some countries use the dollar as its currency. Stocks seen as an indicator of world economy.

U.S. Accounting Standards and International Accounting Standard competes as an international standard that is acceptable as financial reporting standards for capital markets in the world and in the United States. U.S. Accounting Standards and International Accounting Standards were developed in the practice of accounting for the private sector and more emphasis on shareholder interests. While the German standard was developed for the benefit of stakeholders including for tax purposes. Researchers expect that the profits generated by the United States accounting standards and International Accounting Standards have a high level of relevance than the profits generated by the German accounting standards. This study aims to compare the value relevance of accounting earnings generated by the German accounting standards, accounting standards the United States and the International Accounting Standards.

U.S. GAAP, German GAAP and International Accounting Standards

Models in the United States accounting standards and IAS emphasize disclosure of financial statements for the interests of investors and investor prospective are usually separated from the interests and requirements or provisions of any applicable taxes. In other words, the accounting standards prescribed by the capital markets and is not determined by the government. Model of accounting standards in Germany are determined by the government, shareholders, employees, lenders, and the manager or who is often known as stakeholders. In Germany, the banking sector has an important role in the provision of funds.

Qualifications in accounting and regulatory

In the United States, practicing accountants called Certified Public Accountant (CPA), Certified Internal Auditor (CIA) and Certified Management Accountant (CMA). Differences in the type of certification is in terms of the types of services offered, although perhaps only one person has more than one certificate. Additionally, much accounting work is done by someone without the certification but under the supervision of a certified accountant.

CPA certification issued in the state of domicile of the relevant license to offer auditing services to the public, although most firms also supply accounting services, taxation, litigation support and financial consultancy. Requirements for certified CPA vary among states, but the Uniform Certified Public Accountant examination is required in every state. This exam is made and inspected by the American Institute of Certified Public Accountants.

CIA certification issued by the Institute of Internal Auditors (IIA), which is given to candidates who pass the four-part test. CIA mostly provides his services to the employer rather than directly to the public.

CMA certification awarded by the Institute of Management Accountants (IMA), which is given to candidates who passed the four-part test and meet certain practical experience on the terms of the provisions of IMA. CMA mostly provides his services to the employer rather than directly to the public. CMA also offers his services to the public, but with a smaller scope than the CPA.

Bureau of Labor Statistics (Bureau of Labor Statistics) from U.S. Department of Labor (United States Department of Labor) estimates there are about one million people who work as accountants and auditors in the United States.

Accounting principles used in the United States that is generally acceptable accounting principles Accounting standards bodies in the United States

• American Institute of Certified Public Accountants

• Financial Accounting Standards Board

• Governmental Accounting Standards Board

• Federal Accounting Standards Advisory Board

• Securities and Exchange Commission

Ø SIMILARITIES AND DIFFERENCES OF THE ACCOUNTING SYSTEM IN DEVELOPED COUNTRIES

The existence and importance of accounting profession

Accounting profession that is more advanced in developed countries also make the accounting system used by more advanced than in countries that are implementing a centralized accounting system and uniform.

Accounting education and research

Accounting education and research carried out less well in countries that are developing. Professional development is also influenced by education and the quality of accounting research.

The accounting rules

Accounting standards and rules set out in certain countries is certainly not entirely the same as other countries. Role in determining standards of professional accountants and accounting rules were more common in those countries wherewith to enter the professional rules in the rules of the company, such as in Britain and the United States. Meanwhile, Christopher Nobes and Robert Parker (1995:11) explains the presence of seven factors that lead to important differences in the development of international accounting systems and practices. Such factors include the:

(1) The legal system,

(2) The owner of the funds,

(3) The influence of the tax system

(4) Stability of the accounting profession.

(5) Inflation,

(6) Accounting theory

(7) Accidents of history.

The legal system

Company regulations, including in this case is the accounting systems and procedures, much influenced by the legal system in force in a country. Some countries such as France, Italy, Germany, Spain, the Netherlands adhere to the legal system that is classified in the codified Roman law. Codified in law, the rules associated with the basic idea of moral and justice, which tends to be a doctrine. Meanwhile, countries like Britain, the United States and British Commonwealth countries adopted the common law. In common law, the existence of an attempted answer to specific cases and not make a general formulation.

Legal system to determine how individuals and institutions interact. The western world has two basic orientations: the codification of law (civil) and common law (case). Mainly drawn from the legal codification of Roman law and because ode Napoleon. In countries which adhere to the legal system is Latin-codification of Roman law is a complete group that includes the provisions and procedures. Codification of accounting standards and procedures are fair and appropriate thing in there. Thus, in countries that adhere to the codification of law, accounting rules are incorporated in national law and tend to be very comprehensive and covers many of the procedures. In contrast, common law developed on a case by case basis without any attempt to cover all cases in the complete code. Of course, there is a fundamental law, but tended to be less detailed and more flexible when compared with the general codification system. This encourages businesses to try and allow the application of judgment. Common law derived from English case law. In most common law countries, the accounting rules established by private sector professional organizations. This allows accounting rules become more adaptive and innovative. Except for the provisions of a broad base, most of the accounting rules are not incorporated directly into the basic law. Codification of the law (legal code) tend to stare at the payload (contents) of its economy. For example, the lease under the common law rule is usually not capitalized. Instead, the lease under the general law can basically be capitalized if it becomes part of the property buyer.

Sources of funding

By source of funding, the company can be grouped into two. The first group is a company that gets most of the funds of the shareholders in the capital market (shareholders). The second group is a company that gets most of the funds of the bank, state or family funds. Generally, in countries with a majority of companies owned by shareholders but the shareholders do not have access to internal information, the more demands on the disclosure (disclosure), examination (audit) and get an unbiased (fair information). In countries with strong equity markets, such as the United States and Britain, accounting has a focus or how well management runs the company (profitability) and is designed to help investors analyze the cash flow risk associated dependent. Full disclosure is made to comply with extensive public ownership. Instead, the credit-based system in which the bank is the main source of funding, accounting has focused on the protection of creditors through conservative accounting measurement minimize dividend payments and maintain adequate funding in the framework of protection for borrowers. Because financial institutions have the direct access to what information is desired, an extensive public disclosure deemed unnecessary. Examples are Japan and Switzerland.

Tax system

Countries like France and Germany using the company's financial statements as a basis for determining income tax debt, while countries like the United States and Britain to use financial statements have been adjusted by the tax code as a basis for determining the tax debt and delivered separately to the financial statements to shareholders . The extent to which the tax system may affect the accounting system is to look at tax laws determine the extent to which accounting measurement (accounting measurement). In Germany, books must be equal to the tax according to commercial accounting. Whereas in many other countries such as Britain, the United States and also includes Indonesia, there are rules - rules that differ between taxation and commercial companies. The most obvious example of this is depreciation. In most countries, tax legislation effectively determines 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 case in Germany and Sweden. In other countries like the Netherlands, different financial accounting and tax: taxable income is basically the accounting profit adjusted for differences in tax law. Of course, when the separate financial accounting and tax, tax rules sometimes require the application of certain accounting principles. Inventory valuation according Last Sign In First Out (last-in, first-out, LIFO) in the United States is an example.

Accounting profession

Bodies were formed as a container of different professions in each country, and the results of the rules or standards are affected by the shape, authority and members of such bodies. In some countries it was found that the separation of the accounting profession, as a tax expert or just as a corporate accountant. Members of a governing body of accounting standards may consist only of the public accountant or involve parties from business groups, industry, government and educators. The level of education and experience in the practical world as a condition of a person to become a member agency will also determine the quality of accounting standards and rules as the output produced.