AKUNTANSI INTERNASIONAL

CHAPTER II: DEVELOPMENT AND INTERNATIONAL ACCOUNTING CLASSIFICATION

ASEP SURYADI

20208200

4EB11

Ø FACTORS AFFECTING THE DEVELOPMENT OF ACCOUNTING

Factors that influence the development of international accounting are:

1. Sources of Funding

In countries with strong equity markets, accounting has focused on how well management runs the company (profitability), and is designed to help investors analyze the future cash flows and related risks. Instead, the credit-based system in which banks are the main source of funding, accounting has focused on the protection of creditors through conservative accounting measurements.

2. Legal System

The western world has two basic orientations: the legal code (civil) and common law (case). In code law countries, law is a complete group that includes the provision of accounting rules and procedures that are incorporated in national law and tend to be very complete. In contrast, common law developed on a case by case basis without any attempt to cover all cases in which a complete code.

3. Taxation

In most countries, tax rules effectively set the standard because the company should record revenue and expenses in their accounts to claim it for tax purposes. When separate financial accounting and tax, tax rules sometimes require the application of certain accounting principles.

4. Politics and Economics Association

5. Inflation

Inflation causes the distortion of historical cost accounting and affect the propensity (tendency) of a country to apply the changes to the accounts of the company.

6. Economic Development

These factors influence the types of business transactions are conducted in an economy and determine what is most important.

7. Education

Standard accounting practices are highly complex would be useless if misunderstood and misused. Disclosures about the risks of derivative securities will not be informative unless it is read by the competent authorities.

8. Culture

Four dimensions of national culture, according to Hofstede: individualism, power distance, uncertainty avoidance, masculinity.

Ø SIGNIFICANT ACCOUNTING APPROACH IN ECONOMIC DEVELOPMENT ORIENTED MARKET

Initial classification was proposed by Mueller mid-1960s. 1a identifies four approaches to the development of accounting in western countries with market-oriented economic system.

1. Based on the macroeconomic approach,

Obtained accounting practices and are designed to improve the national macroeconomic objectives. General corporate purposes and not to follow the lead of national policy, because business firms to coordinate their activities with policy. Thus, for example, a national policy of employment to avoid changes great in accounting practices that generate income leveling. Or, to encourage the development of certain industries, a state may permit rapid removal of capital expenditure on some of the industry. Accounting in Sweden developed and macroeconomic approaches.

2. Based on microeconomic approach.

Accounting evolved from the principles of microeconomics. The focus is on individual companies that have the purpose to survive. To achieve this goal, the company must be owned physical capital. It is equally important that the company is clearly separate capital from profits to evaluate and control the business activity. Accounting measurements are based on replacement cost is supported as best suited to this approach. Accounting in the Netherlands grew from micro economic.

3. Based on an independent approach,

Derived accounting and business practices and develop an ad hoc basis, with the base slowly and consideration, ¬ trial and error, and errors. Accounting services is seen as a function of the concepts and principles in ambi1 and run business processes, taken from the branches of science such as economics. Businesses face the real world complexity and uncertainty that always happens through experience, practice, and intuition. Accounting develops the same way. For example, profit is simply the most rewarding things in practice and the disclosure in a pragmatic answer the needs of its users. Independently developed accounting in Britain and the United States.

4. Based on a uniform approach,

Standardized accounting and is used as a tool to control by the central government administration. Variability in the measurement, disclosure, and will facilitate the presentation of the designer of government, tax authorities and even managers to use accounting information in controlling all types of businesses. In general, uniform approach is used in countries with greater government involvement in economic planning in which the accounting is used among others for measuring performance, allocating resources, collect taxes and control prices. France, with a uniform chart of national accounting, is a major supporter uniform. Legal system: the General Accounting Law and the Law Code.

Accounting can also be classified in accordance with the legal system of a country. This view has dominated thinking accounting for approximately 20 years. (1) accounting in countries generally have the character "fair presentation," transparency and full disclosure and the separation between financial and tax accounting. Dominate the stock market financial resources and financial reporting is intended for the information needs of outside investors. Accounting standard-setting activities of the private sector tends to be the important role played by the accounting profession. Accounting for common law is often referred to as "Anglo-Saxon," "British-America," or "based on the micro." Accounting for common law originated in England and then exported to countries such as Australia, Canada, Hong Kong, India, Malaysia, Pakistan and US. (2) Accounting in countries oriented code has a legalistic, does not allow disclosure of the amount is less, and conformity between financial and tax accounting. Bank or the governments ("insiders") dominate the financial resources and financial reporting is intended to protect creditors. Accounting standard-setting activities of the public sector tends to be relatively effect of the accounting profession. Accounting code of law is often "continental," "legalistic," or "uniform at the macro level." It's found in most Continental European countries and their former colonies in Africa, Asia, and America. Provision of accounting parallels the character referred to as model "stock holder" and "interested parties" (or corporate governance in state common law and the legal code. A country's legal system and financial system can be linked in a relationship. A legal system in common law emphasizes the rights of shareholders and offers stronger protection

Law protects an investor outside the law is enforced. The result is a strong market developed in common law countries and weak capital markets in developing countries the legal code. Companies in the state law obtain large amounts of capital in a public offering of shares to investors, compared with firms in countries code. Because the investor has a reasonable position on the company, there is a demand for accounting information that reflects the operating performance and financial position accurately. Public disclosure of information to solve the problem of balance (asymmetrical) between companies and investors.

Ø STATE OF DOMINANT IN ACCOUNTING PRACTICES

There are a few dominant countries in the accounting, these are some examples.

FRANCE

France is a major supporter of national accounting in the National Economic world. Ministry Compatible approve General Plan (national accounting code) the first official in September 1947. Revision code was conducted in 1957. The next revision occurs in 1982 by the Fourth Directive of the European Union (EU). In 1986, the plan expanded to implement the provisions of the EU seventh Directive the consolidated financial statements and revised in 1999. Plan Compatible Generable content:

• The purpose and principles of accounting and financial reporting

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

• recognition and valuation rules

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

Accountancy in France is strongly associated with the code so POSSIBLE to miss the fact that commercial legislation (ie Code de Commerce) and the actual tax law accounting practices and financial reporting in France. Code deCommerce ordinance originated from Coulbert (Minister of Finance on eraLouis XIV) in 1673 and 1681 and imposed by Napoleon on in 1807 as part of the creation of law by written law.

The primary basic of accounting rules in France are Accounting Declaration 1983 Accounting Law of 1983, which makes Plan Compatible General use by the entire company. Both documents are part of the Code de comers. Legislation Code de Commerce accounting and reporting.

The special feature is the presence of accounting in France dichotomy separately with the company's financial statements are consolidated group of finance business. France to follow the law company International financial Reporting Standards (IFRS), or even generally accepted accounting principles Dias (GAAP) in preparing the consolidated financial statements. Specially for reason this flexibility is when the Seventh EU Directives enacted in thun1986, many multinational companies from France who has report financial statements based on the principles of Anglo-Saxon for overseas stock listing. French companies in IFRS or GAAP U.S. often it states that they have financial report accordance with international standards or with France and the United States.

JAPAN

Accounting and financial reporting in Japan reflects the influence of domestic and international combined range. Separate two government agencies responsible for the regulation of accounting and law firms in Japan tax income have more influence as well. The first in the 20th century, thought to reflect accounting German influence; in the second half, the ideas of the influential U.S.. Lately, the influence of body the International Accounting Standards Board in 2001 began to be felt and major change occurred with the formation of private organization sector as a maker of accounting standards.

Japan is a traditional society with strong cultural roots and religion. Group consciousness and interdependence of personal and corporate relation against independent reasonable relationship between individuals and groups in the countries of West Japan. Company equity shares belonging to each other, and together often have other companies. It is produced interlocked investment industry conglomerate that bigger called keiretsu.

Banks often become part of a large industry in this group. Usage bank loans and debt capital which extends to fairly large paid company much when viewed from the perspective of corporate management west and more accountable primarily to banks and other financial institutions, compared to shareholders. The central government also imposed a strict control over the various business activity in Japan, which means a strong bureaucratic control in matters of business, including accounting. Prime business limited knowledge about the activities of the company and other parties such as banks and government.

These keiretsu venture capital, is in line with reformation structural changes made to overcome the stagnation economic of Japan began in the 1990s. The financial crisis that followed the Japanese bubble the outbreak of the economic also encourage the evaluation of financial reporting standards all of Japan. It is apparent that many accounting practice hide how bad the company in Japan. Major in accounting a changed announced at the end of the 1990s the Japanese company's economic health for become increasingly transparent and bring Japan closer to international standards.

ACCOUNTING CLASSIFICATION

International accounting classification can be done in two ways:

a. Classification of the considerations depend on knowledge of intuition and experience.

b. The empirical classification using statistical methods to collect the data bases of accounting principles and practices worldwide.

A. Four Approaches to the Development of Accounting

Initial classification was proposed by Mueller mid-1960s. He identified four approaches to the development of accounting in Western countries with market-oriented economic system

1. Based on the macroeconomic approach, derived from the accounting practices and are designed to improve the national macroeconomic objectives. For example, a national policy of stable employment with avoiding major changes to the business cycle will result in a leveling practice accounting profit.

2. Based on microeconomic approach, developed from accounting principles micro economic. The focus lies on individual company that has a purpose to survive.

3. Based on independent approach, accounting practices derived from the business and develop an ad hoc basis, with the base slowly from consideration, trial and error, and errors.

4. Based on the approach of a uniform, standardized accounting and is used as a tool for administrative control by the central government. Uniformity in the measurement, disclosure, and will facilitate the presentation of the designer of government, tax authorities and even managers to use accounting information in controlling all types of businesses.

B. Legal system: Common Law and the Law of Accounting Codes

Accounting can also be classified in accordance with the legal system State.

1. Accounting in common law countries have oriented character of the "fair presentation" of transparency and full disclosure and the separation between financial and tax accounting. Accounting for common law is often called the "Anglo Saxon", "Britain, America," or "based on the micro". Accounting for common law originated in England and then exported countries are like Australia, Canada, Hongkong, India, Malaysia, Pakistan, and the United States.

2. Accounting in code law countries have a legalistic-oriented characteristics, does not allow disclosure of the amount is less, and conformity between financial and tax accounting. Accounting code of law called "continental", "legalistic", or "uniform macro". This law is found in Continental European countries and their former colonies of the Asia, Africa and America.

3. System Action: Presentation of Fair Accounting Vs Legal Compliance

The difference between fair presentation and legal compliance pose a major influence on many accounting issues, such as:

a. Depreciation, where the load is determined based on the reduction in the usefulness of an asset over the useful economic (fair presentation) or the amount allowed for tax purposes (legal compliance)

b. A lease which is substantially the purchase of fixed assets treated as such (fair presentation) or treated like a regular lease (legal compliance)

c. With the ever Pension costs accrued at the time incurred by the employee (fair) or charged according to the basic pay at the time you stop working (legal compliance)

Ø THE DIFFERENCA BETWEEN FAIR PRESENTATION AND COMPLIANCE WITH STATE LAW AND WHERE THE DOMINANT APPLICATION

Some countries are dominant on the development of accounting include:

(1) France

(2) Japan

(3) United States

In the progress the countries France and Japan are less dominant than the United States. It can be seen from the development of Japanese accounting in its development is currently based on existing IFRS.

Basic Classification of International Accounting

International accounting classification can be done in two ways, namely:

(1) Deductive approach

Which identifies the relevant environmental factors and linking it with national accounting practices, an international grouping or pattern of development proposed.

(2) Inductive Approach

Accounting practices were analyzed individually, the pattern of development or grouping identified and at the end of the explanation is made from the standpoint of economic, social, political and other factors.

Fair Presentation and Compliance differences Against the Law on the State of the Dominant

Differences fair presentation and compliance with law through many troubles. This concern the adjustments made to the application of IFRS as the basis for the presentation. Some problems include:

(1) Depreciation, where the load is determined based on the reduction in the usefulness of an asset during times of economic benefits.

(2) A lease which is substantially the purchase of fixed assets (property) treated as such (fair presentation) or treated as operating leases are common (legal compliance).

(3) Pension costs accrued at the time generated by the employee (fair presentation) paid or charged on the basis of the time you stop working (legal compliance).

Ø IMPORTANT ISSUES THE DIFFERENCE BETWEEN FAIR PRESENTATION AND COMPLIANCE WITH LAWS

Issues Important Differences Fair Presentation and Compliance Against the Law Important issues that occur when it is about the application of IFRS basis presentation. So that the countries that have not made adjustments to the fair presentation put through his report.