Worldwide Accounting Diversity
Worldwide Accounting Diversity
Prepared by:
Noor Edden Al Hamaideh
Submitted to:
Dr. Sulyman Atieh
Diversities in accounting standards in different countries pose significant challenges to the international investment community. While current efforts to harmonize international accounting standards by the International Accounting Standards Board (IASB) and the International Organization of Securities Commissions (IOSCO) are laudable, differences in accounting standards across national boundaries largely remain a fact of life. Although participants in the international investment community recognize that differences in accounting measurement and disclosure rules across countries can affect the usefulness of accounting numbers in accessing firm values and affect the flow of international capital, and affect the comparability of cross-countries financial statements.
As the new millennium started, international economic activity along with other international activities has been increasing at a very rapid rate. International trade, capital movements between countries, international investment, number of multinational firms, and international bond and equity offerings exhibited a huge growth over the last decade. (Table I) shows International Equity Offerings made by companies from five geographic regions for years 1995 and 1999. As observed, the value of equity offerings for the total market increased from $57,725 million to $151,887 million. This represents an increase of almost three times. The volumes of activity for North America, Europe, and Asia-Pacific are more notable. The volumes of activity for Latin America and Africa-Middle East regions are low when compared to the other three regions. This is normal because most of the multinational companies which engage in equity offerings are headquartered in more developed countries. These companies are continuously seeking higher returns and growth and less costly financing. In their quest for higher
Prepared by:
Noor Edden Al Hamaideh
Submitted to:
Dr. Sulyman Atieh
Diversities in accounting standards in different countries pose significant challenges to the international investment community. While current efforts to harmonize international accounting standards by the International Accounting Standards Board (IASB) and the International Organization of Securities Commissions (IOSCO) are laudable, differences in accounting standards across national boundaries largely remain a fact of life. Although participants in the international investment community recognize that differences in accounting measurement and disclosure rules across countries can affect the usefulness of accounting numbers in accessing firm values and affect the flow of international capital, and affect the comparability of cross-countries financial statements.
As the new millennium started, international economic activity along with other international activities has been increasing at a very rapid rate. International trade, capital movements between countries, international investment, number of multinational firms, and international bond and equity offerings exhibited a huge growth over the last decade. (Table I) shows International Equity Offerings made by companies from five geographic regions for years 1995 and 1999. As observed, the value of equity offerings for the total market increased from $57,725 million to $151,887 million. This represents an increase of almost three times. The volumes of activity for North America, Europe, and Asia-Pacific are more notable. The volumes of activity for Latin America and Africa-Middle East regions are low when compared to the other three regions. This is normal because most of the multinational companies which engage in equity offerings are headquartered in more developed countries. These companies are continuously seeking higher returns and growth and less costly financing. In their quest for higher