Difference between international accounting and domestic accounting
Answers
Explanation:
This study analyzes determinants and effects of differences between Domestic Accounting Standards (DAS) and International Accounting Standards (IAS). We use an extensive list of differences between DAS and IAS to create two indices, absence and divergence. Absence measures the extent to which the rules regarding certain accounting issues are missing in DAS but are covered in IAS. Divergence applies in circumstances where the rules regarding the same accounting issue differ in DAS and IAS. It measures the extent of differences between DAS-based rules and IAS-based rules.Using a sample of 30 countries for 2001, we show that absence is (mainly) determined by the importance of the equity market and ownership concentration, while divergence is positively associated with the level of economic development and the importance of the accounting profession, but is constrained by the importance of equity markets. Our analysis suggests that a higher level of absence implies more opportunities for earnings management and for decreases in firm-specific information to investors. A larger divergence from IAS is associated with richer firm-specific information in capital markets.
International accounting and domestic accounting
Explanation:
Domestic accounting: every country have their own accounting standards and methods which must be followed while preparing books of accounts and are called domestic accounting. it is followed by companies which deal in only domestic business. domestic accounting is done in home currency and is easier than international accounting
International accounting: international accounting on the other hand includes accounting standards and concepts of various countries. MNC's which operates in various countries need to follow the local accounting procedure and then they need to compile the data so the overall performance of the company can be determined. this also involves different currencies making the work difficult.
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International accounting and domestic accounting
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