Accounting and International Business
Accounting provides information to capital markets, large capital markets, both domestically and internationally. Accounting has been extended to the area of management consulting and involving the greater portion of the information technology systems and procedures. Thus accounting clearly responsive to environmental stimuli.
2. Development of International Accounting
Iqbal, Melcher and Elmallah (1997:18) defines international accounting as the accounting for transactions between countries, comparisons of accounting principles in different countries and harmonization of accounting standards around the world.
Accounting must evolve in order to provide the information required in decision-making in the company in any business environment changes. Here are the characteristics of the era of global economy:
a. International business.
b. Loss of boundaries between countries global economic era is often difficult to identify the country of origin of a product or company, this is the case in multinational companies.
c. Dependence on international trade.
3. Differences Accounting System
Basically it’s the same accounting is a means for management to communicate keaungan position, performance and position changes keaungan to interested parties. However, in addition to the common understanding of these, accounting also have differences in its application. Differences that arise due to: economic growth, inflation, political systems, education, professional accountants, tax laws, money and capital markets.
4. Evolution and Role in International Business
The evolution and development of international business can be translated into four phases:
a. Pre-industrialization era
Pre-industrial era marked by the mercantilist system, accompanied by reasons of political domination and colonization that occurred in the 16th century until the 17th century.
b. Age of Industrialization
In the late 18th century to 20th century developments in technology and transportation industries to improve the flow of goods and services. At this time the development of business is growing rapidly.
c. After World War II era
At this period of political stability neatly packed world began. The growth of international business grew rapidly. Demand for goods and services offset by production capabilities.
d. Era of Multinational
At this time the international aspects of corporate functions are increasingly important. Transaction volume to support a major international companies to the economy of a country.
5. Accounting Aspects of International Business
In the framework of international business, firms must provide information keungannya. Therefore, the company will meet many obstacles such as language differences, currency and financial accounting standards. The role of financial accounting experts who understand the language, foreign exchange and international accounting standards is essential to overcome this problem.
6. The International Accounting
International accounting covers two main aspects of the discussion is a description and comparison of the dimensions of accounting and accounting for international transactions. In the first aspect, discussed the idea of international accounting standards and accounting practices in various countries as well as accounting standards and practices are compared to each country are discussed. In addition, international accounting aspects also discussed financial reporting, foreign exchange, taxation, international auditing and management for international business.
7. Environmental Factors That Influence Development Of Accounting
Choi et. al (1998: 36) describes a number of environmental factors are believed to have a direct impact on the development of accounting, among others:
a. Legal System
b. Political System
c. The nature of Business Ownership
d. Differences in magnitude and complexity of Business Companies
e. Social Climate
f. Competency levels of Business Management and Finance Community
g. Interference levels of certain legislative business.
h. There are certain Accounting Legislation
i. Speed Business Innovation
j. Economic development stage
k. Economic growth patterns
Currently provides accounting information for capital markets, large capital markets, both domestically and internationally. Accounting has been extended to the area of management consulting and involving the greater portion of the information technology systems and procedures. Thus accounting clearly responsive to environmental stimuli. Accounting standards can not be separated from environmental influences and conditions of the legal, social and economic development of a particular country. These things lead to an accounting standard in a country different from that in other countries. Globalization appears among others from trading activities between the state and the emergence of multinational firms will result in a requirement applicable accounting standards widely around the world.