Mr. A. Jallow:
I want to take a moment in congratulating you for the "Finance/Accounting
Discussing List" initiative. This is well overdue.
Accounting is a social science that every institution must make an effort in
promulgating standards that can vividly illustrate valuation and measurement.
Accounting is a branch of applied economics and it provides information and
financial transactions for users of that information.
As multinational companies are increasing their market share, international
accounting is vital for all the stakeholders who are directly or indirectly
affected by national borders. Accounting in reality, has many amounts that
may differ very substantially according to the principles that govern them.
Differences in culture, business practices, political, regulatory structures,
currency values, foreign exchange rate, local inflation rates, business
risks, and tax codes must be considered in deciding where and how to do
business. Financial statements and other disclosures are impossible to
understand without an awareness of the underlying accounting principles and
business culture.
Accounting has been successful in its ability to be transplanted from one
national setting to another. Increase developments in telecommunications and
computer technology allow information to be recorded, transmitted, and
reviewed with a speed of accuracy that was unthinkable just few years ago.
Another dimension is the increase in international trade that has made it
possible for accounting to serve the interests of business managers and
owners. Governments, labor, consumer groups, environmentalists, social
activists, and creditors all have interests in the business activities.
Accounting is service oriented and has such, remains technically and socially
useful. It must respond to ever-changing needs of society and must reflect
the cultural, economic, legal, social, and political conditions within which
it operates.
In the area of international accounting, accountants pay attention to
classification. Classification of financial accounting systems permits users
to investigate why and how a given system differs. It also helps them in
analyzing whether systems are converging or diverging through time. The
primary goal of classification is to group countries according to the common
elements and distinctive characteristics of their financial accounting
systems. This illustration further groups countries as common-law or code
law.
To be continued.
Comrade,
Muhammad Lamine Jassey-Conteh
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