Ans no.

The major factors affecting the global environment of accounting and financial
reporting are as follow;

1.     Economic development: Over the past few years, most countries have
recorded economic development and this has affected the environment of
accounting and financial reporting due to the increase in wealth.

2.     The political environment: The politics in a country may make affect

global environment of accounting and financial reports by making it hard to
account for wealth of some politicians.

3.     Privatization of state-owned corporations: This makes it hard to account

for the wealth or financial situations of the corporations thus affecting the
global environment of accounting and financial reporting.

4.     The development of stock market. The stock market affects the global
environment of accounting and financial reporting due to fluctuation of
currencies.

Ans.4
There are major international differences in accounting practices whereby
different companies in a country may use different accounting systems. This
differences between companies mainly influenced by a company’s country,
size, sector or number of stock exchange listings. It is very significant that
banks are the capital provider for small family-owned business in Germany,
France and Italy. However, in the United States and the United Kingdom there
are large numbers of companies that rely on millions of private shareholders
for finance.
Differences in the ownership structure and the way these companies are
financed have been singled out as leading to the differences in financial
reporting of these companies. In cases where countries do come up with very
drastic changes or the professional accountants also fail to clearly interpret
and use these IFRS in a manner that is consistent, then there is the risk of not
achieving comparability.
The differences in accounting practices across countries are not obvious when
it comes to all accountants. Such differences that have been widely noted have
to do with the ownership and financing practices of companies, which have
the potential of leading to the differences in financial statements .
One of the differences in the ownership and financing of companies could lead
to differences in financial reporting is external environment and culture.
Clearly, its environment, including the culture of the country in which it
operates, affects accounting. We can se from the argues of Hosted stated that
culture include a set of societal values that drive institutional form and
practices.
Another reasons that could lead the differences in financial reporting are
Providers of finance. Several countries like Germany, France and Italy, capital
provided by banks in very significant.
Ans.1

Multinational enterprises are Organizations that have their presence through

the establishment of their facilities, equipment and other assets in more than
country. Several examples includes Apple, Nike, Adidas etc.

There are several factors that has led to the rise of Multinational enterprises
some of which has been explained below.

Explanation

I. The need to generate more revenue and profits: The need for more revenue
and profits has led to the rise of Multinational enterprises. Many Organization
have chosen to grow into Multinational enterprises because they need to
generate more profits and revenue from their activities and Operations.

II. The need to be close to its target market: The need to be closer to their
customers has caused many organization to become Multinational as such will
help them to come very close to their customers in some countries.

III. The need to enjoy the benefits of economies of scale: Another reason for
the rise of Multinational enterprises is the need for economies of scale, they
want to be able to effectively reduce the costs of operations and materials by
buying materials in large quantities which will r duce the overall cost of raw
materials etc.

IV. The need to meet the needs of customers: To meet the needs of customers
Organizations have gone Multinational.

Example: Apple has been able to effectively meet the needs of its customers in
countries like China and other Asian countries by ensuring that has a presence
in China, where it can make its products and market them to the customers
there.
Ans.2 The Second World War (WWII) was one of the major transformative
events of the 20th century, with 39 million deaths in Europe alone. Large
amounts of physical capital were destroyed through six years of ground
battles and bombing. Many individuals were forced to abandon or give up
their property without compensation and to move on to new lands.

The effects that have the major political events in the world since the end of
the Second World War had on accounting and financial reporting are as
follow.

I. It has helped to improve the process of financial reporting: The major

political events since the end of the second world war has helped to improve
the overall process of financial reporting and statements. It has helped
Organization and accounting bodies to effectively Implement guidelines and
procedures that has helped to improve the overall process of financial
reporting.

II. It has helped to create standards and systems that has helped to make
financial reporting more accurate and trustworthy: This is another impacts of
the political activities since the second world war on financial reporting, it has
helped the world to institute bodies and organs that has helped to develop
standards which has helped to improve the overall accuracy of financial
reporting.

III. It has helped to make financial reporting more Technologically driven:

This is another major ways through the the political activities of the second
world war has helped to influence financial reporting it Has caused
organization to effectively make use of Technological advancements in
preparing financial reporting and making the More accessible.
Ans.8

De jure standards, or standards according to law, are endorsed by a formal

standards organization. The organization ratifies each standard through its
official procedures and gives the standard its stamp of approval.

De facto standards, or standards in actuality, are adopted widely by an

industry and its customers. They are also known as market-driven standards.
These standards arise when a critical mass simply likes them well enough to
collectively use them. Market-driven standards can become de jure standards
if they are approved through a formal standards organization.

Because of the processes involved, de jure standards can be slow to produce.

Development and approval cycles can take time as each documented step is
followed through the process. Achieving consensus, while important and
good, can be a lengthy activity. This is especially apparent when not all
members of the committee want the standard to succeed. For various reasons
—often competitive business—participants in a committee are there to stall
or halt the standard. However, once a de jure standard completes the entire
process, the implementers and consumers of the standard gain a high level of
confidence that it will serve their needs well.

De facto standards are brought about in a variety of ways. They can be closed
or open, controlled or uncontrolled, owned by a few or by many, available to
everyone or only to approved users. De facto standards can include
proprietary and open standards alike.  
Ans.7 Accounting harmonization is a process that reduces alternatives while
retaining a high degree of flexibility in accounting practices.

There are many arguments against international harmonization of

accounting standards and they are as follow-

A. Considering the differences among countries in terms of socio-

politico-economic systems, it would be almost impossible to
arrive at a set of accounting standards that would satisfy all
of the parties involved.

B. Nationalism. International standards would be perceived as a set of

standards developed to suit the requirements of other countries, and
hence would not be received favorably.

C. The need for harmonization is not universally accepted.

D. It is unnecessary to force all companies worldwide to follow a

common set of rules. Today’s global capital market has evolved
without harmonized accounting standards.

E. It would lead to a situation of standards overload.

Ans 5. The international accounting considers clustering of national
accounting systems of various countries based on similar financial reporting
characteristics. These include: (1) the nature of business ownership and the
financial system, (2) culture, and (3) the level of accounting education and the
experience of professional accountants in each of the different countries.
These lead to degree of interference by governments in accounting. Every
government play the most vital role in regulating a state. In doing so, different
systems are used based mainly from the country's needs rooted from their
culture and traditions. As we now, each country has different traditions.
Because of this, various interpretations as to the applicable accounting
systems are formulated. The government then acts accordingly to the
demands of the country, which is distinct for each.

Ans.6 Comparability of the financial information presented by companies is

one of the objectives of countries' switching from using local accounting
practices to the IFRS Framework. One reason for difficulties when comparing
performance in companies could be different mandated accounting regimes
where different accounting methods are prescribed for a specific accounting.
This is what Ding et al. calls divergence. Likewise, some accounting issues
might not be covered in one or both accounting regimes, which is what Ding et
al. calls absence. But even across countries prescribing the same accounting
regime, difficulties can be.