Question

Importance of Accounting and international business

Write a 250 words post explaining why having an international accounting overview is important. Provide examples.

Answer 1

INTERNATIONAL ACCOUNTING :

International accounting is a field of accountancy which uses international accounting standards to perform the function of accounting. For any financial accountant to work globally and to deal with globally associated companies, needs to be aware of international accounting and international accounting standards

OVERVIEW OF INTERNATIONAL ACCOUNTING AND ITS IMPORTANCE :

International accounting takes into consideration the INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) issued by international accounting standard board (IASB).The IASB has created IFRS to promote and regulate the business across borders. IFRS are the globally accepted accounting standards that helps in better comparability, accountability and transparency while recording the financial transaction or while accounting. It helps the users of financial statements to be aware about the operational results of the enterprise.A company following the IFRS is said to be reporting as per the regulatory framework.

It is significantly important to have an overview of international accounting and IFRS for the compliance of laws and regulations along with the ethics compliance. It will act as a uniform code to be followed while operating a business and while the accounting of that business.

Moreover, it will lead to improvement of international investment as it will attract potential investors after easy and transparent comparability of the results of international companies.It enables investors and potential investors to view the details required by them to decide whether they are interested to invest in a a particular international company. For example, an investor may compare the financial results of two international companies for a particular period , following a same set of standards in order to arrive at a decision that in which company, he is interest to invest.

It also ensure that an accepted generalized standards are set, to be followed widely by all the enterprises at an international level. Therefore, there will be set of principles being followed globally for better presentation of financial statements of the company. For example, international accounting does not provide any special and specific formats for presentation of the financial statements of the company which gives an ease and freedom to the company to present the financial statements in their best possible way.

Therefore, having an overview of international accounting is very important these days to understand the financials results of companies operating at a global level.