Introduction
Financial statements are organized and offered for external users by many enterprises around the globe. Although such financial statements may appear comparable from nation to nation, there are differences which have possibly been caused by a variety of social, economic and legal conditions and by different countries having in mind the requests of different users of financial statements when setting national necessities.
As today's companies become more globally oriented and expand into multinational corporations, there is a growing need to compress financial and accounting regulations into a homogeneous unit. To achieve this homogeneity, accounting practices in the modern economic market must strive for a symbiotic relationship with globalization. Because consumer capitalism has spread to non-originating countries, and non-Americanized cultures, the practices of accounting and financial management must standardize their policies. Thus, accounting must be regarded beyond capital market settings, and the different effects that accounting has had in such sites must be examined and converge to a simpler mode.
How Accounting is Changing Globalization
Since leading companies have subsidiaries in all important market regions, globalization has changed record keeping. Globalization is operating and investing, but also financing. The home base of most global investors is the United States, and hence, one of the major sets of standards for accounting is the Generally Accepted Accounting Principles (GAAP). However, some countries cannot interpret this format, or they are following the International Financing Reporting Standards (IFRS), the second major global standa ...