Factors Affecting Worldwide Accounting Diversity

1339 Words Oct 2nd, 2016 6 Pages
The several factors affect worldwide accounting diversity are:
1. Country 's legal System:
It is worth to be mentioned that the two type of legal system are code law; non-English-speaking countries, and common low; the English-speaking countries.
- In the code law, the corporation low or it 's called a commercial code is responsible to create the fundamental legal parameters to control the business enterprise. Corporation low also specify the financial statements should published with a required format. Under code low, the accounting low does not include many details and does not include a guidance in certain areas.
- In the common law, the specific accounting rules does not establish by governmental body, the profession or a variety of constituencies independent (nongovernmental) responsible to establish the accounting rules. Under common law, the accounting low include many develop detailed rules.
2. Taxation
Taxation effect worldwide accounting diversity because some countries "published financial statements form the basis for taxation", but other countries the financial statements are modified for tax purposes and confirmed to the government separately from the reports sent to owner of stock person.
3. Political and economic ties
Due to the political and economic links, the accounting rules will easily move between countries. For instance, England and France conveyed their accounting frameworks to several countries via previous colonialism. Also, Canada, Mexico and…
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