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Contris international heritage
Double-entry originates in the Italian city states.
Bookkeeping spreads to Germany and assists the spread of capitalism.
What is meant by the term, global capital markets, and what does development mean for capital market participants?
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What is International Accounting?
Domestic accounting: an information specialty providing information about a firm to users of that information as a basis for economic decisions.
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Dutch enhance income measurement.
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French use accounting for governmental planning and control.
Double entry assists the British in managing and controlling commercial interests in the colonies.
Consolidation of foreign accounts Accounting for foreign currency fluctuations Accounting for changing prices International planning and control Performance evaluation of foreign operations Financial risk management International taxation and transfer pricing
Accounting serves people and institutions whose decisions are international in scope.
Accounting diversity creates a demand for harmonization.
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International accounting (defined): same as above except that the firm being reported on is a multinational company with operations and transactions that cross national boundaries or an entity with reporting obligations to non-domestic readers.
Learning Objectives
How is international accounting distinct from domestic accounting?
What does international accounting diversity entail?
Does international accounting have a history?
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Contributing Factors (contin)
Growth and spread of multinational operations
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Contributing Factors (contin)
Reporting issues when business transcends national boundaries
What factors are contributing to the importance of international accounting as a field of study?
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What external and internal reporting issues arise when business and investing transcend national borders?
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What Does International Accounting Diversity Entail?
Measurement principles Financial disclosure (corporate transparency) Auditing practices
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•Financial innovation
Identifying potential market risks Quantifying trade-offs associated with
alternative risk reduction strategies Measuring risk exposures Accounting for specific hedge products Evaluating the effectiveness of hedging
Accounting plays a major role in the U.S. industrial revolution.
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Contributing Factors (contin)
Paradox of international accounting
In many countries, accounting remains a nationalistic affair.