Introduction to International Accounting

The Different Between International Accounting with Anothers Accounting

Accounting plays a very important role in society. The purpose of accounting is to provide information that can be used by the decision to make economic decisions. Accounting should develop in order to be able to provide the necessary information for management to make a good decision to their companies or organizations.

Accounting process for International accountins is no different with certain reporting standards qualification that set by local in certain countries. But it’s important to know about the international dimension of the process of accounting in each country are different. Where the difference is included, the difference  business culture, practices, political structure, legal system, the value of the currency, inflation rate local, business risk, and as well as statutory rules affect how multinational companies conducting operational activities and provide a robust set of reports.

To find out more the difference international accounting with other accounting, we have to find out first what’s the international accounting. So when you’ve got it automatically we can know the difference.
The definition of international accounting is the accounting for transactions between countries, benchmarking of accounting principles in different countries and the harmonization of accounting standards around the world.
One company begin to engage with international accounting is at the moment getting the opportunity to do transaction export or import. Export is defined as sales overseas and domestic companies starts when the seller get a purchase order from the buyer.

The difficulties began to arise at a time when domestic companies want to initiate an investigation of the feasibility of the company to foreign buyers. If the buyer is asked to provide financial information relating to the company, it is possible that the financial information is not easily interpreted, given the assumptions of accounting and accounting procedures are not uncommon in the seller company.
Another thing that must be anticipated if the buyer pays in is the foreign currency. For example, a company in Indonesia sold their product to companies in the Japan, and the buyers pay in Japanese Yen. The domestic companies must to anticipate any loss or profit potential that may arise due to changes in exchange rates between the time of purchase order note with the receipt of payment.
Implementation itself involves many parties such as export company shipping, insurance, customs, and other supporting documents required widely around the world and bank. In this case it certainly also need any anticipation over all costs generally involve the use of different currencies. For imports, the above conditions encountered by the company otherwise would foreign sellers. The conditions that must be considered by a domestic buyer is the domestic currency exchange rate against foreign currencies as denominations of the agreed payment. Including payments to freight forwarder and shipping companies if the import is done with the terms of the free on board.

The company’s involvement in international accounting also is inevitable when the company opened operations in a foreign country, whether it was just a grant of license production of the company belong to other parties outside the country as well as the establishment of subsidiaries abroad. In terms of licensing, companies need to develop a system of accounting which allows licensors to conduct supervision over implementation of the agreement, the payment of royalty and technical guidance as well as the recording of income from abroad in relation to the taxes that must be paid to the company. Accounting for operating subsidiaries in foreign countries must comply with the rules set out by the Government and institutions that are authorized in the country in question, with different rules in the country of the parent company.

In addition to be made as well as management information system to monitor, supervise and evaluate the operations of subsidiaries as well as making the system to consolidate operating results of parent company and subsidiary. International accounting becomes increasingly important with large multinational companies (multinational corporation) operate in various countries in the areas of production, product development, marketing and distribution. In addition the capital market also grew rapidly, supported by the communication and information technology advances so as to enable transactions in the international capital markets takes place in real time basis.

So, in general, there are some things that the international accounting differs from the other, the difference is on international accounting studies: Reporting for MNC/MNE, Limit State, Reporting to other parties in different countries, International Taxation, International Transactions.

International Accounting is Divided into Three Broad Sections

In the international accounting is divided into three areas, accounting includes several extensive proceedings were, among others:

1. Measurement
Can provide in-depth feedback regarding the probability of a company operating and financial positions of power. The process of identifying, categorizing and calculating aktivtias and transactions, provide in-depth feedback regarding profitability and operations.

2. Disclosure
The process by which the measurement accounting communicated to the users of the financial statements and is used in the decision making process or communicate it to the user.

3. Auditing
The process by which the special accounting professional circles (the auditor) do atestasi (testing) with respect to the reliability of the measurement process and communication.

History and Trend of International Accounting Accounting International Financial Sector Policy

International accounting history is history. The following chronology shows that the accounting has had great success in his ability to be applied from one state to another state, while on the other hand allow the emergence of continuous development in the field of theory and practice worldwide. For starters, double-entry system (double entry bookkeeping), which is generally regarded as an early creator of accounting as we know so far, starting from the town in Italy in the 14th century and 15.

At first, beginning with the accounting system of double-entry (double entry bookkeeping) in Italy in the 14th century and 15. Double entry bookkeeping (double entry bookkeeping), considered the beginning of the creation of accounting. Modern accounting started in double entry accounting was found and used in business activity, namely the multiple listing system (double entry bookkeeping) Luca introduced by paciolo (in 1447).

Double entry bookkeeping (double entry bookkeeping) is a standard practice of recording financial transactions. Bookkeeping process only involves recording transactions in a variety of journals and books giving estimates of the classification code (ie the collection of raw financial data), which became the basis for the accounting systems that collect and organize raw data into useful information.

Luca Pacioli was born in Italy in 1447, he was not an accountant but the priest who is an expert mathematician, and lecturer at several universities in Italy. Luca who first published the basic principles of double accounting system in his book: the Arithmetica geometria proportioni Summa et proportionalita in 1494. However many historians argue that the basic principles of double accounting system is not a pure idea Luca but he only summarizes the accounting practices that took place at the time and publish it. It is recognized by the Lica (Radebaugh, 1998).

Business practices with the reference method venetian Luca wrote the book has become the method adopted not only in Italy but almost all the countries of Europe such as German, Dutch, English. Dutch accounting in the accounting model to export such as Indonesia, the accounting system in the French Polynesian and African territories under French rule. Reporting framework of the German system is influential in Japan, Sweden, and Russian empires. Half of the 20th century, as growing economic power of the United States, the complexity of accounting issues arise simultaneously. Then accounting is recognized as a separate academic discipline. After World War II, the accounting impact increasingly felt in the western world. Accounting is supported by the development of education (the emergence of business schools), as times change and the development of international relations, the hassle of getting into accounting.

Contemporary point of view

The existence of a number of additional factors that add to the importance of studying international accounting. These factors are derived from the reduction of significant and persistent barriers to trade and control of the national capital that has occurred over the progress of information technology.

Some of this perspective include:

1.  Any attempt to reduce international accounting differences
2. National controls on capital flows
3. Foreign exchange
4. Foreign direct investment
5. The liberalization of the transaction
6. Privatization of government enterprises (for the reduction of foreign exchange controls and restrictions on cross-border investment)
7. Advances in information technology

The concept of comparative accounting or international accounting to international accounting point of the study and understanding of national differences in the skuntansi. This includes:

Awareness of international diversity in corporate accounting and reporting practices.
Understanding of the principles and accounting practices of each countries.
Ability to assess the impact of the diversity of accounting practices in financial reporting.

The emergence of a new paradigm in the international accounting framework and expand the idea to incorporate new ideas of international accounting. As a result, appeared to be a very long list of concepts and theories created by Amenkhienan accounting to include the following:

1.   Universal theory or world
2.   The theory of multinational
3.   The theory of comparative
4.   Theory of international transactions
5.   Translation theory

Each of the above theories provide the basis for the development of a conceptual framework for international accounting. Although there will be arguments about what the theory would be preferred.

Iqbal, Melcher and Elmallah (1997: 18) defines an international accounting as the accounting for transactions between countries, comparisons of accounting principles in different countries and harmonization of accounting standards around the world.

A company became involved with the international accounting is when getting the chance to export or import transactions. Export is defined as sales to overseas and domestic seller begins when companies get a firm purchase orders from foreign buyers. Difficulties – difficulties began to arise when the domestic firm to conduct an investigation into the feasibility of foreign acquirers.

If the buyers are requested to provide financial information relating to the company, there is the possibility that financial information is not easily interpreted, given the assumptions and procedures of accounting akkuntansi unusual in the selling firm. Most companies are just starting out in international business can have recourse to the bank or accounting firm with international expertise to analyze and interpret the financial information.

The Role of Accounting in the Business Sector and the Global Capital Markets

International accounting covers two main aspects of the discussion is a description and comparison of the dimensions of accounting and accounting for international transactions. In the first aspect, discussed the idea of international accounting standards and accounting practices in various countries as well as accounting standards and practices are compared to each country are discussed. In addition, international accounting aspects also discussed financial reporting, foreign exchange, taxation, international auditing and management for international business.

Other factors also contributed the growing importance of international accounting is the phenomenon of global competition. Determination of reference (benchmarking), to compare the performance of an act of the parties with a reasonable standard is nothing new, but the standard of comparison used is now beyond national borders is nothing new.

According to the regulations in the United States, to be listed on the NYSE Market issuers need to do the following.

1. The registration process
2.  Submit financial statements. They can use U.S. GAAP, IAS or GAAP of each country but each have additional requirements between other:
3. Fill out Form 20-7 for the annual report
4. To reconcile net earnings and equity to conform with U.S. GAAP
5. Provide disclosure in accordance U.S. GAAP
6. Submit quarterly reports that are not necessary in the audit

As we know that the capital market watchdog aims to protect public shareholders, especially individual investors (individual investors). While the Private Placement or Institutional Investor market is usually considered to have the ability to examine the feasibility of an investment, so no need to specifically get government protection.

In global capital markets transactions known QIB (Qualified Institutional Buyers). This grouping is intended to limit the institutional market participants. This group must be at least menginvest of U.S. $ 250 quadrillion. For this investor group typically does not require much disclosure (disclosure) the financial statements.

In addition known as ADR or American Depositary Receipts. This method is intended to convert the shares into the domestic market from outside the United States making it more compatible with economic conditions and investors. For example, the stock value of $ 10,000 can be broken down to be worth U.S. $ 100 per share or U.S. $ 0.10 seballiknya can be made to U.S. $ 100.00 per share. In addition there is another ADR GDR (Global Depository Receipts) that the nature and meaning as to facilitate the investors to invest in a variety of markets, companies or countries. This situation is all the trigger and accelerate the process towards a global market and global accounting

source
AKUNTANSI INTERNASIONAL MEIFIDA ILYAS, SE, Msi
http://jerysidjabat7.blogspot.com/2011/04/pengertian-akuntansi-internasional.html