In the following article, Christopher Nobes suggests that there are several reasons for the differences in accounting systems throughout the world. Read the article and write a two page report on the following: (1) Identify two reasons for differences in accounting systems around the world, according to Nobes. (2) State your own opinion about what the author is saying. (3) Write a prediction of the future: Think ahead ten years from now. Prepare a classification of accounting systems that you think will exist then. What factors motivate your particular classification?
The article first examines the existing modelling literature, which contains a large number of suggested reasons for international differences in accounting. After examining terminological problems, a preliminary parsimonious model is developed to explain the initial split of accounting systems into two classes. The term 'accounting system' is used here to mean the financial reporting practices used by an enterprise. A country might exhibit the use of several such systems in any one year or over time. Consequently, it should be systems and not countries that are classified. The model proposes a two-way classification using two variables: the strengths of equity markets and the degree of cultural dominance. Implications for classifiers and rule-makers are suggested.
Attachment:- Classification International accounting.rar