In: Accounting
Explain the international accounting based on the three main levels of views
Answer :
International accounting can be defined at three different levels.
1. The first level is supranational accounting, which denotes standards, guidelines, and rules of accounting, auditing, and taxation issued by Supranational organizations. Such organizations include the United Nations, the Organization for Economic Cooperation and Development, and the International Federation of Accountants.
2. At the second level, the company level, international accounting can be viewed in terms of the standards, guidelines, and practices that a company follows related to its international business activities and foreign investments. These would include standards for accounting for transactions denominated in a foreign currency and techniques for evaluating the performance of foreign operations.
3. At the third and broadest level, international accounting can be viewed as the study of the standards, guidelines, and rules of accounting, auditing, and taxation that exist within each country as well as comparison of those items across countries.
Examples would be cross-country comparisons of
(a) rules related to the financial reporting of plant, property, and equipment;
(b) income and other tax rates; and
(c) the requirements for becoming a member of the national accounting profession.