Question

Why does Chapter 2 of International Accounting (7th edition) contend that many accounting distinctions at the national level are becoming blurred?

Do you agree? Why or why not?

Answer 1

Solution:-

I do agree with the book. The first reason for blurred accounting distinctions is the growth of stock markets as a source of finance. This creates “a pressure for a world of corporate reporting” (Choi & Meek, 2011). Next, dual financial reporting is more common than ever before. One set of statements will comply with local requirements while the other covers international requirements. It is important for companies to disclose the accounting practice at the national and transnational level because of the difference in accounting standards. Another reason accounting distinctions are becoming blurred is because some countries involved in code law have changed who is responsible for setting accounting standards. The government is no longer responsible, private-sector groups are. This procedure is found in countries such as Germany and Japan (Choi& Meek, 2011).

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