International Accounting

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European Union (EU)

The European Union (EU) is a distinctive economic and political union. It was established on the first of January 1958 with 27 member countries. The EU is located primarily in Europe (European Union, 2013). France, Germany, Italy, Netherlands, Belgium and Luxembourg founded the Treaty of Rome in the year 1957 and established The European Economic Community. (The European Union, 2012)

The European Union’s main aim was create a business environment that’s united by harmonizing taxes and laws of companies, to form incorporated capital markets and endorse openness between counties during good and labor transfer. (Aswathapa, 2010)
EU Harmonizing efforts

The European Union EU has worked to harmonize accounting
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The IASB frameworks when developing the accounting standards purposes were divided into 4 categories. The categories are as following:
• Outlining the objectives of the financial statements.
• Defining the financial statements fundamentals.
• Outlining features that make the financial statements beneficial.
• Describing the capital preservation concept. (Dodge, 1988) (Refer to Appendix 2 & 3)

IASC/IASB Harmonizing efforts

The IASC is one of the most important bodies that played a vital role in harmonizing the accounting practices. They achieved their main goal, which is issuing standards that are comparable by going through a lot of work. The work process will be briefly explained in the diagrams bellow:

The following diagram shows the work process after the year 2001. According to Schroeder, et al (2011) after the year 2001 the work was done by the IASB after it was substitute for the IASC. All of the following work was done including the agreement of Norway:

Motives of Harmonization

Countries all over the world differ from each other for several factors, such as economics, social political, language, ethnicity and culture. Every country set and follows it owns rules, policy or regulation that support and maintain it personal benefits/ interest. However, these differences between countries set each country with its own outline for creating their regulations, standards and
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