Question

prepare a quick analysis of a country you are familiar with, discussing some of the factors affecting an accounting system of the country:

Legal system

Providers of financing

Taxation

Inflation

Political and economic ties

Culture

Answer 1

Accounting Syestem of a county will be effected by various internal and external factors of the entity its operating the quick analysis of some of factors are.

Legal System:

Legal system is a influential factor describes how an accounting system is created and how it operates. The legal systems of most countries can be classified as systems marked by strict adherence to laws and regulations

Legal system is more adaptable if focuses on transparent and timely financial reports, as well as on the information needs and protection of investors.

Providers of financing:

For any business to operate finance is most important factor , Financial treatment of fund providers are to taken in to account and there accounting treatment, options and benfilts available to them in the system shall be explained properly such as long term short tems, stocks, bonds, debentures and their benefits to explained properly.

Taxation:

Taxation system of the nation is the one of the major factors in the Accounting, the change in the tax system regularly shall be updated on regular basis and their impact on the accounts has to examined properly.

Inflation:

An economy’s level of inflation can also be considered in the context of its influence on a country’s accounting system, in particular because it affects the asset valuation method and because, in conditions of high inflation, it is essential to have an accounting system suited to inflationary conditions.

Political and economic ties:

It is considered a major influential factor of accounting systems and reporting systems alike. The impact of this factor is also evident through history, with invading countries imposing their political, as well as their accounting system on the countries they have conquered and colonised. It is also a fact that many countries, upon gaining independence, have continued to use the same political and accounting system even though it no longer suits their current needs and economic situation, whereas others have opted for a different political and accounting system.

Culture:

In addition to knowing a country’s legal, political or financing system, it is also necessary to know something about its culture in order to better understand the country’s differences and its accounting practice. Even when financial reports are comprehensible to users with regard to language, monetary unit or the accounting principles applied, culture should be considered as a factor that affects the development of an accounting system. The assertion that culture is interrelated with the environment and that it is, at the same time, affected by other influential factors is the likely reason of its rarely mentioning in the literature as an influential factor