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Consider the following statements by David Cairns, former secretary-general of the International Accounting Standards Committee. 26 When we look at the way that countries
Consider the following statements by David Cairns, former secretary-general of the International Accounting Standards Committee. 26 When we look at the way that countries or companies account for particular transactions and events, it is increasingly difficult to distin- guish in a systematic way so-called Anglo-American accounting from Continental European accounting or American accounting from, say, German accounting. 27 I am increasingly persuaded ... that the distinction between Anglo-American accounting and Continental European accounting is becoming less and less relevant and more and more confused. In reaching this conclusion, I do not dispute that different economic, social and legal considerations have influenced the development of accounting in different coun- tries. I also do not dispute the fact that there have been, and still are, differences in the means by which different countries determine accounting requirements and the form of the resulting requirements. I do believe, however, that those who continue to favour these clas- sifications are ignoring what is happening in the world and how companies actually account for transactions and events. It is increasingly apparent that the different economic, social and legal considerations which have influenced national accounting do not necessarily result in different accounting and that countries are reaching the same answers irre- spective of their different cultural backgrounds (or reaching different answers in spite of the similar cul- tural backgrounds). In fact, there are now probably far more similari- ties between American and German. accounting than there are between American and British accounting. There are many reasons for this not least the increasing practice of stan- dard setting bodies and other regu- lators to share ideas and learn from one another. They do this in the IASC, the UN, the OECD, the EU, and such groupings as G4. This cross-fertilization of ideas is not surprising because standard setting bodies in all countries are having to address the same accounting problems.28 Required 1. Do you agree with Cairns's asser- tion that classifications of account- ing are simplistic and of little relevance in today's world? Are attempts to classify accounting futile and outmoded? Why or why not? 2. Some observers contend that finan- cial reporting is becoming more and more alike among "world-class" companies the world's largest multinational corporations-and especially those listed on the major stock exchanges, such as London, New York, and Tokyo. What is the relevance of this contention for clas- sifications of accounting, and what are the factors that would cause this to happen?
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