Chap 18 - International Financial Management and Accounting1

Chap 18 - International Financial Management and...

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Unformatted text preview: © 2007 Robert Sweo International Accounting © 2007 Robert Sweo Accounting Systems in a Multinational ● Tax Accounting System – Unique to each country ● Public Accounting System – Unique elements in each country ● Managerial Accounting System – Hopefully consistent across company ● So a company with offices in 5 countries will probably be keeping at least 11 sets of accounts © 2007 Robert Sweo Accounting Standards ● Important Note – Most countries use different accounting systems. Therefore – Accounting numbers are not comparable across countries without a great deal of correction ● US – FASB and GAAP ● Many others – Variations of IASB ● Most – Unique variations of above or something completely idiosyncratic © 2007 Robert Sweo Accounting Systems Vary Because of ● Political and economic ties with other countries Countries that have a lot political and comercial connections tend to have similar accounting systems (US and Canada) ● Relationships between businesses and providers of capital ● Levels of inflation If inflation is erradical then accounting rules have to be loose ● National culture – optimism (going away concern0 vs conservatism (Mark the value of assests to what you can sell right now) ● Level of economic development © 2007 Robert Sweo International Financial Management © 2007 Robert Sweo Financial System Must Consider ● Political risks ● Variations in sources of funding...
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Chap 18 - International Financial Management and...

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