Factors Influencing International Accounting Essay

As a social science, accounting is affected by the environment in which it operates, but at the same time, it is one of the factors impacting on this same environment. This is a fact that points to the interdependency of accounting and its environment. A country’s accounting system is affected by a variety of historical, economic, socio – cultural, institutional, and other non – accounting factors, so it is highly unlikely for the influential factors of any two countries to be exactly the same. Therefore, it can be logically assumed that the factors affecting the development of a country’s accounting system are also the generators of special national traits and, thus, the generators of differences between accounting systems at the international

Several comments on influential factors can be singled out from the literature. For example, Saudagaran (Saudagaran, 2004, 3 – 7) lists ten influential factors, while pointing out that this is not an exhaustive list, and that the intensity of differences in accounting at the international level depends upon the intensity of dissimilarities of individual factors between countries. In this case, he lists the following factors that affect a country’s accounting development: 1) Type of capital market, 2) Financial reporting system, 3) Types of business entities, 4) Legislative system, 5) Application degree of legislation, 6) Inflation level, 7) Political and economic relations with other countries, 8) Status of the accounting profession, 9) Existence of a conceptual framework, 10) Quality of education in