individual 6 - Angela Fischlein Individual Assignment 2....

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Angela Fischlein Individual Assignment 2. What is the International Accounting Standards Board? Why has the board been unable to obtain uniform global application of its standards? The International Accounting Standards Board (IASB) was formed by the major accounting organizations of several countries to develop and promote uniform international accounting standards. The board has been unable to obtain global application of its standards because it has no global enforcement power. 5. Why is it important to understand the economic system under which a company operates before entering into a business relationship? The economic system that a company has been operating under determines the type of accounting information collected by the company. Internal accounting information is critical in the valuation of a company. If there are no standards to establish accounting information, then there is no information that can be used in understanding and evaluating the future success of a company and the potential benefits of doing business internationally are highly uncertain. 6. Briefly describe how the following environmental forces affect accounting practices: a. Political and legal systems can affect accounting practices because of: Political risk related to unstable governments Changes in regulation or law Changes in taxes, tariffs and fees Different reporting requirement across borders b. Economic systems affect accounting practices because they: Determine the amount of information available to investors Can be a planned economy (government controlled) Are sometimes industrial organizations, such as the South Korean chaebol c. Culture affects accounting practices because: People’s perceptions of economic situations differ in different societies Marketing and advertising must be adapted for different cultures Differing mindsets across borders, such as individualistic vs. collectivist societies or large vs. small power distance.
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individual 6 - Angela Fischlein Individual Assignment 2....

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