Five factors are often mentioned as affecting a countrys accounting practices

Five factors are often mentioned as affecting a country’s accounting practices

6. Five factors are often mentioned as affecting a country’s accounting practices: (a) legal system, (b) taxation, (c) providers of financing, (d) inflation, and (e) political and economic ties.


Consider your home country. Identify which of these factors has had the strongest influence on the development of accounting in your country. Provide specific examples to support your position.

7. As noted in the chapter, diversity in accounting practice across countries generates problems for a number of different groups.


Answer the following questions and provide explanations for your answers.

a. Which is the greatest problem arising from worldwide accounting diversity?

b. Which group is most affected by worldwide accounting diversity?

c. Which group can most easily deal with the problems associated with accounting diversity?

8. Various attempts have been made to reduce the accounting diversity that exists internationally. This process is known as convergence and is discussed in more detail in Chapter 3. The ultimate form of convergence would be a world in which all countries followed a similar set of financial reporting rules and practices.


Consider each of the following factors that contribute to existing accounting diversity as described in this chapter:

· Legal system

· Taxation

· Providers of financing

· Inflation

· Political and economic ties

· Culture

Which factor do you believe represents the greatest impediment to the international convergence of accounting? Which factor do you believe creates the smallest impediment to convergence? Explain your reasoning.

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