Wider still and wider: the international expansion of the accounting profession

Article Abstract:

Experts at the London Business School have determined that the internationalization of the accounting profession has been fostered by three factors: the expansion of multinational corporations (MNCs); the necessity for economies of scale and scope to efficiently meet the auditing needs of MNCs; and the competitive advantage in the are of reputation gained by doing international service for MNCs and international agencies. Factors working against the internationalization of the profession include: differences in language, legal systems, and culture. Concerns that the movement of accounting firms into new business areas, such as consultancy, will engender conflicts of interest may limit expansion. The internationalization of the accounting profession has increased the efficiency of world-wide accountancy, but it may have distorted local accounting systems by imposing a US/UK-based model.

Management, Reports, Accounting and auditing, Accounting, International business enterprises, Multinational corporations, London Business School

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When is a contract onerous?

Article Abstract:

Financial Reporting Standard (FRS) 7 provides a guide for the accounting treatment of adjustments made to fair value if onerous contracts exist at the time of a company's acquisition. While FRS 7 does not provide specific guidelines for handling all situations, it does elaborate on the basic accounting principles that have to be followed in such cases. These principles, clear-cut as they are, can be used to arrive at a sensible way to treat any adjustments made as a result of an onerous contract or commitment. Illustrative examples of how to apply FRS 7 to onerous contracts are provided. These examples include cases when the acquiring company was unable to terminate existing contracts that were disadvantageous to its interests.

Laws, regulations and rules, Acquisitions and mergers, Financial statements, Form of contract

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