Masters Thesis

International accounting: a comparative analysis of the balance sheet in the United States, Great Britain, The Netherlands, and Israel

A study of accounting practices in 25 countries by the American Institute of Certified Public Accountants reveals many variations in accounting principles, auditing standards, and reporting practices. This is to be expected in view of the varying development stages and local requirements. However, while these differences exist, it should be recognized that basically accounting is a common language. Double-entry book-keeping and annual financial statements are the implements and fruits of accounting all over the world. Income is income, assets are assets, and liabilities are still liabilities no matter v/hat language or dialect is used, although the lack of uniformity may result in serious inconvenience and misunderstanding. There are also differences in the legal requirements and practices as to the form and contents of the balance sheet. Auditors' reports vary from a simple signature in The Netherlands to the strictly formalized long reports found in the United States and the United Kingdom. Accounting, auditing, and reporting practices have evolved in each country in accordance with the economic conditions, industrial development, and legal system. Laws have laid down basic requirements for reporting and auditing; but the accounting principles and auditing standards are the result of the accountants' own desire to attain the highest possible professional standards and recognition of the profession. The need to develop an international acceptable theory of accounting is a prerequisite to achievement of international accounting standards. In order to develop an international acceptable theory, an understanding of national theories and practices must be achieved so as to enable comparisons. This paper endeavors to analyze and compare the balance sheets of four countries. These countries are leaders in the accounting world or countries in which accounting has played an important role in their economic development.

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