THE DEFINITION OF INTERNATIONAL ACCOUNTING
THROUGH TEXTBOOK CONTENTS
Dr. Hervé Stolowy
HEC School of Management (Groupe HEC)
Department of Accounting and Management Control
1, rue de la Libération
78351 - Jouy en Josas Cedex - France
Phone: +331 39 67 94 42
Fax : +331 39 67 70 86
E-mail: stolowy@gwsmtp.hec.fr
For Presentation at the 8th World Congress of the
INTERNATIONAL ASSOCIATION FOR ACCOUNTING EDUCATION
AND RESEARCH (IAAER)
Paris, France, October 23-25, 1997
Second draft (January 31, 1997)
May not be quoted or used without permission. Review comments welcomed. Please contact the
author.
_____________________________________________________________________________
Acknowledgments. The works referred to in this report were studied by the author and by Véronique N'Guyen and
Philippe Touron, students on the HEC doctoral program at the School’s Department of Accounting and
Management Control. The study is based on a comparative table, developed after consulting several experts in the
field, to whom we extend warm thanks: David Alexander, University of Hull (UK), Frederick Choi, New York
University (USA), Gary Meek, Oklahoma State University (USA), Christopher Nobes, University of Reading
(UK), Robert Parker, University of Exeter (UK), Lee Radebaugh, Brigham Young University (USA), Steven
Salter, University of Cincinnati (USA), Stefano Zambon, University of Padua (Italy).
Particular thanks go to Michel Tenenhaus, Professor at the HEC Group, who supplied valuable help in statistical
processing of data, for which we were assisted by Philippe Touron.
We should also like to thank Michel Lebas, Professor at the HEC Group, who reviewed a first draft of this paper
and contributed to its improvement. However, responsibility for the results and opinions expressed remains solely
and entirely with the author.
Finally, we wish to thank Ann Gallon, for her much appreciated help in preparing the English language version of
this paper.
THE DEFINITION OF INTERNATIONAL ACCOUNTING
THROUGH TEXTBOOK CONTENTS
ABSTRACT
In the last twenty-five years, international accounting has developed significantly, and this is reflected in the
particularly wide range of literature published on the theme. But there is a paradox: we have noted that although
many works referred to factors that have had an internationalizing influence on accounting, few of them gave any
real definition of the concept of international accounting. Furthermore, there is no one single definition of
international accounting, and several ideas currently co-exist.
This study aims to identify the field of international accounting by reference to a sample of European and
American textbooks on the subject. It should further our knowledge of the way in which international accounting
is approached in these textbooks, and enable academics to assess their position in relation to the various
approaches currently used for international accounting education.
The methodology was as follows: (1) Establishment of a detailed bibliography of books on international
accounting; (2) Selection of a sample of publications; (3) Definition of a table for analysis of the sample; (4)
Application of the analysis table to the sample; (5) Classification; (6) Analysis of contents using the tables, based
on a principal component analysis; (7) Definition of international accounting by the authors; (8) Conclusion.
Among other observations, our statistical analysis revealed the dual nature of textbook approaches to international
accounting. There is one group of textbooks covering the accounting aspects of company internationalization, with
a "monistic" view of accounting systems, in other words one which considers financial accounting and
management accounting together; these books are concerned with the accounting dimensions, in the broadest
sense, of multinational corporations. Then there is a second group of textbooks which take a country-by-country
approach, and seek to highlight the differences between countries. Problems relating to the internationalization of
accounting frameworks are dealt with locally, on a national level. It is true that a few books have a "mixed"
approach, but they remain clearly affiliated to one of these two groups.
Can the existence of a link between the group a book belongs to and its author’s institution of education be pure
coincidence? One thing is clear: the first group of books are written by authors teaching in the USA, while the
second group are written by European-based authors.
INTRODUCTION - PRESENTATION
The development of international accounting
In twenty-five years, international accounting, as G. Mueller1 states, has outgrown its childhood
and adolescence to become a young adult, and its growth is reflected in the large quantity of
accounting literature in the sphere. Why are researchers and academics so interested in this
"discipline" ? There are several possible answers. F. Choi and G. Mueller2 point out that now at
the end of the twentieth century, a period shaped by the forces of global competition, operating,
financing, and investing decisions are colored by their international implications. As many of these
decisions are premised on accounting data, a knowledge of international accounting issues is
crucial for achieving proper interpretation and understanding in international business
communications.
Paradoxically, we have observed that although many publications referred to factors with an
internationalizing influence on accounting, few of them supplied any real definition of the concept
of international accounting. Furthermore, there is no one single definition of international
accounting, and several visions of the concept currently co-exist.
Objectives of the research
This research aims to identify the field of international accounting by reference to a sample of
European and American textbooks on the subject. It should further our knowledge of the way in
which international accounting is approached in these books, and enable academics to assess their
position in relation to the various approaches currently used for teaching international accounting.
Methodology
Our goal is to identify the field of international accounting based on the themes covered by
textbooks on international accounting, and also their prefaces, forewords and introductory
chapters.
The following methodology was applied: (1) Establishment of a detailed bibliography of books on
international accounting; (2) Selection of a sample of publications; (3) Definition of a table for
analysis of the sample; (4) Application of the analysis table to the sample; (5) Classification; (6)
Analysis of contents using the tables, based on a principal component analysis; (7) Definition of
international accounting by the authors; (8) Conclusion.
-1-
1 - ESTABLISHMENT OF A DETAILED BIBLIOGRAPHY OF BOOKS ON
INTERNATIONAL ACCOUNTING
Our bibliography was drawn up by consulting the following sources: (1) the HEC library data
base; (2) the University of Paris-Dauphine library data base; (3) the catalogues of the major
American and British accounting publishers: Addison-Wesley, Chapman & Hall, Harcourt Brace
Professional Publishing - Academic Press, Irwin, John Wiley & Sons, McGraw-Hill, Prentice
Hall, Routledge, South-Western Publishing, and The Dryden Press; (4) bibliographies from books
on international accounting (the "snowball" effect).
We were looking for publications with the following key words in their titles: (1) "accounting"
and "international"; (2) "accounting" and "multinational"; (3) "accounting" and "Europe" (or
"European"); (4) "reporting" and "international"; (5) "comptabilité" and "internationale"; (6)
"comptabilité" and "Europe" (or "européenne" or "C.E.E." or "Union européenne"); (7)
"principe(s) comptable(s)" and "Europe" (or "européenne" or "C.E.E." or "Union européenne");
(8) "ragionaria" and "internazionale".
2 - SELECTION OF A SAMPLE OF PUBLICATIONS
Several books have been published in more than one edition, and it would have been interesting
to examine developments in the way their authors approached international accounting as the
years passed3. This type of historical perspective would reveal which issues were emerging, and
which declining. However, for the purposes of this study, we decided to examine the current state
of affairs, and only the most recent editions of the selected works were used.
Books on international accounting can be divided into four categories: (1) Textbooks, (2)
Reference books (country-by-country presentation), (3) Published research or anthologies, and
(4) Case studies.
This paper refers only to textbooks. We determined that it was not advisable to analyze reference
books, whose main objective is to describe accounting practices in a certain number of countries.
Moreover, these works are not always truly comparative accounting studies, as they often only
allot a relatively small amount of space to comparison4.
For similar reasons, we eliminated from our sample publications relating to international
accounting but which represented research in the field, such as "Judgment in international
accounting" by A. Belkaoui (1990), "International Group Accounting", coordinated by S. Gray,
A. Coenenberg and P. Gordon (1993), and "International Accounting: A Survey" by J. Samuels
-2-
and A. Piper (1985). All of these are of great interest, but were eliminated as a result of our
desire to study the way international accounting is viewed from an education standpoint, which
led to textbooks alone being selected for the final sample.
We are aware that our system of classification is debatable, as a "textbook" is a relative concept.
Of course some research work, and even reference books (for example the collection directed by
L. Klee - see appendix 2) can be used as a basis for teaching. In addition, American textbooks
have a very standardized presentation - chapter objectives, chapter, questions, specific
bibliography - whereas European textbooks, particularly French ones, do not generally include
such headings.
For borderline cases, objective criteria had to be applied. It was thus decided to exclude all works
which did not contain questions or a bibliography, and so we arrived at a sample of 15 books
published since 1990 (see appendix 1). The publications we did not select are listed in appendix 2.
3 - DEFINITION OF A TABLE FOR ANALYSIS OF THE SAMPLE
In order to define a table to analyze our sample and obtain comparable data, we sent a list of 34
topics (see appendix 3) to 12 accounting academics and international accounting specialists,
asking them to divide them into 10 or 12 main themes5. 8 answers were received, and 6 were
perfectly apt for use in the study. The following experts sent us their answers: David Alexander,
University of Hull (UK), Frederick Choi, New York University (USA), Gary Meek, Oklahoma
State University (USA), Christopher Nobes, University of Reading (UK), Robert Parker,
University of Exeter (UK), Lee Radebaugh, Brigham Young University (USA), Steven Salter,
University of Cincinnati (USA), Stefano Zambon, University of Padua (Italy).
Several of our respondents remarked that the basic list was American in origin and therefore had
a certain in-built bias, since many of the proposed topics were based on the American view of
international accounting. While in agreement, we believe that the effect can be counterbalanced,
as the list of topics is very detailed, and quite capable of adaptation to a non-American context,
particularly a European context. Furthermore, the sole aim of this list was to draw up a list of
themes, not to apply the "American" list of topics to all the publications in the sample. The
classifications received from respondents were relatively similar, except in the case of certain
topics which call for the following comments:
•Transfer pricing can be included in international taxation (in 2 of the 6 answers), in managerial
accounting (1 of the 6 answers), in both of these themes (1 of the 6 answers) or in a different
theme (2 of the 6 answers). This range of opinions illustrates the fact that transfer pricing covers
-3-
both taxation and management control aspects that are difficult to separate. For the purposes of
the study, only one theme could be accepted, and the decision was made to include transfer
pricing in the taxation theme.
•Foreign currency management (foreign currency transactions and translation) is a major concern
in international accounting. Three of our six experts put foreign currency management in general
(topics 11, 12 and 15 of the list in appendix 3) into a different theme from accounting for foreign
exchange transactions and translation (topics 13 and 14). Two put all these topics into the same
theme, while one included foreign exchange risk management (topic 15) in the "managerial
accounting" theme. For simplicity’s sake, and to avoid increasing the number of themes, we opted
to put all foreign currency-related topics into a single theme.
The themes determined in this way are listed below:
Table 1: List of themes
1
2
3
4
5
6
7
8
9
10
General presentation (Introduction/Definition of international accounting, emerging issues)
Classification of financial reporting practices (classifications and differences, environmental influences)
Comparative accounting practices (by countries and by issues)
Harmonization/International standards
Financial reporting and disclosure
International financial statement analysis
Foreign currency management (exchange rate, foreign-currency transactions and translation, future
contracts, transaction exposure, accounting for inflation)
Managerial accounting (management control, strategic planning, performance evaluation, capital
budgeting for multinationals, accounting information systems for multinational corporations)
International taxation (systems, transfer pricing)
Auditing (internal, external)
4 - APPLICATION OF THE ANALYSIS TABLE TO THE SAMPLE
We determined the proportion of the publication occupied by each theme in relation to the space
devoted to all themes as a whole, by calculating the number of pages allotted to it. This enabled
us to obtain comparable data for all the publications. In drawing up the tables, the following
conventions were adopted:
•when several themes are covered in the same chapter, with references, illustrations, case
studies, etc., we allocated the appendices to the relevant themes, proportionally to the number of
pages on each theme in the chapter.
•some themes can be approached from two angles. For example, inflation can be considered
from a comparative point of view, covering practices in several countries: in this case, we
-4-
included it in theme n° 3 (comparative accounting practices). If, on the other hand, it is treated as
a question of accounting for price fluctuations, from a general, and often American standpoint,
we have put it into theme n° 7 (foreign currency management).
The same applies to translation of accounts into foreign currencies. Either the approach is
comparative, and theme n° 3 applies, or translation is considered from an essentially American
angle, in which case it is included in theme n° 7 (foreign currency management).
To reduce the bias inherent in application of this analysis system by one individual, the same table
was used by three different persons: the academic leading the study, and two students on the
HEC doctoral program. The results were combined, to take into account differences in each
person’s assessment of the table and interpretation of the publications. The resulting final tables,
with results for each work studied, are summarized in table 2 below.
Table 2: Comparison: relative importance of themes covered
General
presentation
Classification of
financial
reporting
practices
15%
7%
5%
0%
7%
2%
11%
17%
Comparative
accounting
practices
27%
25%
0%
66%
Campedelli
Choi & Mueller
Evans, Taylor
Iqbal, Melcher & Elmallah
Lawrence
8%
3%
8%
4%
2%
0%
10%
0%
2%
2%
76%
13%
19%
23%
80%
16%
7%
6%
6%
6%
0%
11%
0%
7%
0%
0%
6%
0%
21%
11%
0%
25%
33%
10%
0%
0%
10%
10%
12%
0%
Mueller, Gernon & Meek
Nobes & Parker
Obert
7%
7%
1%
8%
9%
0%
12%
69%
50%
9%
5%
6%
21%
0%
25%
8%
5%
0%
5%
0%
3%
22%
0%
0%
8% 0% 100%
0% 5% 100%
0% 15% 100%
4%
9%
20%
0%
7%
35%
55%
28%
0%
7%
7%
45%
34%
11%
0%
0%
4%
0%
0%
12%
0%
0%
10%
0%
0%
6%
0%
0% 100%
7% 100%
0% 100%
7%
5%
7%
9%
36%
27%
11%
10%
7%
11%
7%
8%
10%
11%
6%
7%
5%
6%
4% 100%
5%
0%
Alexander & Nobes
Alhashim & Arpan
Belkaoui
Blake & Amat
Quesada, Blanco & Gonzalez
Radebaugh & Gray
Zambon
Average
Standard deviation
Harmon
-ization/
International
standards
12%
14%
8%
4%
FinanInterForeign Mancial
national curren- agerreport- financial
cy
ial
ing and
state- manage- accdisment
ment
ounclosure analysis
ting
0%
23%
9%
0%
3%
12%
14%
9%
0%
14%
30% 16%
0%
3%
3%
0%
Inter- Audit Total
na- -ing
tional
taxation
7% 0% 100%
4% 10% 100%
15% 0% 100%
0% 6% 100%
0%
8%
17%
6%
0%
0%
7%
7%
9%
0%
100%
100%
100%
100%
100%
5 - CLASSIFICATION
The prefaces, forewords and introductory chapters of the selected works contained pointers to
several possible classifications of topics and themes. T. Evans, M. Taylor and O. Holzmann
-5-
(1994, p. 2) believe that the most important topics in international accounting fall into two
categories:
Financial accounting topics: Translation, Consolidation, Segment reporting, Inflation
accounting, Disclosure, Auditing, Taxation, Comparative accounting (with non-US nations).
Managerial accounting topics: Foreign exchange risk management, Foreign investment analysis,
Information systems, Transfer pricing, Budgeting, Performance evaluation, Control, Operational
auditing.
This categorization is somewhat debatable, as it gives the role of foreign currencies, for example,
an impact in both areas, and has the same effect for other topics, such as consolidation or the
treatment of inflation.
These authors state6 that international accounting is a well-established specialty area within
accounting and has two major dimensions: (1) Comparative: Examining how and why accounting
principles differ from country to country; and (2) Pragmatic: accounting for the operational
problems and issues encountered by individuals and firms in international business. Although, in
our opinion, there is no common division in these two systems of classification, Evans, Taylor
and Holzmann add that the comparative dimension of international accounting is oriented toward
financial accounting, and the pragmatic one tends to be managerial.
L. Radebaugh and S. Gray (1993, p. 9) also write that the study of international accounting
involves two major areas: descriptive/comparative accounting and the accounting dimensions of
international transactions/multinational enterprises. This second area principally covers the
problems encountered by multinational corporations: Financial reporting problems, translation of
foreign currency financial statements, information systems, budgets and performance evaluation,
audits, and taxes. On the basis of this classification, our themes are distributed as follows:
Table 3: Classification of themes: Radebaugh/Gray
Descriptive/comparative accounting
1
2
3
4
5
6
General presentation
Classification of financial reporting practices
Comparative accounting practices
Harmonization/International standards
Financial reporting and disclosure
International financial statement analysis
7
8
9
10
-6-
Accounting dimensions of international
transactions/multinational enterprises
Foreign currency management
Managerial accounting
International taxation
Auditing
Using the classification proposed by T. Evans, M. Taylor and O. Holzmann (1994), the results
are as below:
Table 4: Classification of themes: Evans/Taylor/Holzmann
1
2
3
4
5
6
9
10
Financial accounting
General presentation
Classification of financial reporting practices
Comparative accounting practices
Harmonization/International standards
Financial reporting and disclosure
International financial statement analysis
International taxation
Auditing
7
8
Managerial accounting
Foreign currency management
Managerial accounting
Another approach would be to group the themes under the headings of information production or
information utilization.
Table 5: Classification of themes based on the concepts of information
production/utilization
1
2
3
4
7
9
10
Accounting information production
General presentation
Classification of financial reporting practices
Comparative accounting practices
Harmonization/International standards
Foreign currency management
International taxation
Auditing
5
6
8
Accounting information utilization
Financial reporting and disclosure
International financial statement analysis
Managerial accounting
A fourth system of classification can also be proposed, based on the number of themes covered
out of the ten selected themes. First, the presence or absence of themes in a given publication
must be noted (see table 6 below)7. The summarized results (see table 7, number of pages) are
then used to classify the sample textbooks according to the categories in the above tables.
-7-
Table 6: Number of themes
Foreign Man- In- Audit- Total
InterFinannational currency agerial ter- ing
cial
report- financial manage- acc- natio
oun- nal
ment
ing and stateting taxment
disation
closure analysis
0
1
1
0
1
0
7
1
1
1
1
1
1
10
0
1
1
1
1
0
7
1
Comparative
accounting
practices
1
Harmon
-ization/
International
standards
1
1
1
1
1
1
0
1
1
Blake & Amat
0
1
1
1
0
1
1
0
0
1
6
Campedelli
Choi & Mueller
1
1
0
1
1
1
1
1
0
1
0
1
0
1
0
1
0
1
0
1
3
10
Evans, Taylor
1
0
1
1
0
0
1
1
1
1
7
Iqbal, Melcher & Elmallah
Lawrence
1
1
1
1
1
1
1
1
1
0
1
1
1
0
1
0
1
0
1
0
10
5
Mueller, Gernon & Meek
Nobes & Parker
Obert
1
1
1
1
1
0
1
1
1
1
1
1
1
0
1
1
1
0
1
0
1
1
0
0
1
0
0
0
1
1
9
6
6
Quesada, Blanco & Gonzalez
Radebaugh & Gray
Zambon
1
1
1
0
1
1
1
1
0
1
1
1
1
1
0
0
1
0
0
1
0
0
1
0
0
1
0
0
1
0
4
10
3
General
presentation
Classification of
financial
reporting
practices
Alexander & Nobes
1
Alhashim & Arpan
Belkaoui
Table 7: Classifications
Alexander & Nobes
Alhashim & Arpan
Belkaoui
Radebaugh/Gray
Evans/Taylor/Holzmann
Production/Utilization
Descriptive/ Accounting Total Finan- Manag- Total Accounting Accoun- Total
comparative dimensions
cial
erial
information
ting
accounting
of
account accountproduction
informinternational
-ing
ing
ation
transactions
utilization
84%
16% 100%
91%
9% 100%
77%
23% 100%
63%
37% 100%
77%
23% 100%
76%
24% 100%
39%
61% 100%
54%
46% 100%
70%
30% 100%
Blake & Amat
Campedelli
Choi & Mueller
91%
100%
50%
9% 100%
0% 100%
50% 100%
97%
100%
65%
3% 100%
0% 100%
35% 100%
97%
100%
73%
3% 100%
0% 100%
27% 100%
Evans, Taylor
Iqbal, Melcher & Elmallah
Lawrence
33%
63%
100%
67% 100%
37% 100%
0% 100%
57%
78%
100%
43% 100%
22% 100%
0% 100%
90%
60%
89%
10% 100%
40% 100%
11% 100%
Mueller, Gernon & Meek
65%
35% 100%
73%
27% 100%
49%
51% 100%
Nobes & Parker
Obert
Quesada, Blanco & Gonzalez
95%
81%
100%
5% 100%
19% 100%
0% 100%
100%
97%
100%
0% 100%
3% 100%
0% 100%
95%
75%
66%
5% 100%
25% 100%
34% 100%
Radebaugh & Gray
Zambon
65%
100%
35% 100%
0% 100%
78%
100%
22% 100%
0% 100%
76%
100%
24% 100%
0% 100%
-8-
6 - ANALYSIS OF CONTENTS OF TEXTBOOKS USING THE TABLES
The sample textbooks on international accounting were classified on the basis of relevant criteria.
A principal component analysis , using two tables of data (table 2, Relative importance of themes
covered, and table 7, Classifications, plus the total themes as shown in table 6), brings out the
factors which predominate in each publication’s contents. This means that the properties of a
relatively high number of variables (10 for table 2 and 7 for table 7) can be contained in two or
three factors. The results obtained for table 2, then table 7 are presented below. Two different
classifications were developed in this way.
6.1 Table 2 - relative importance of themes covered
Three factors are used. They can analyze almost 75% of the global dispersion of individuals, in
other words 75% of the spatial translation of individuals.
6.1.1 The factors
The meaning of a factor is determined through interpretation of the axes. This interpretation is
facilitated by the factorial coordinates of variables along the axis (see Diagram 1).
Diagram 1
RELATIVE IMPORTANCE OF THEMES
Position of themes in relation to factor 1 and 2
1.0
Harmonization / International standards
General presentation
Classification of financial
reporting practices
.5
International Financial
Statement Analysis
International Taxation
0.0
Managerial Accounting
Comparative Accounting Practices
Foreign Currency management
Financial Reporting and Disclosure
-.5
Auditing
Factor 2
-1.0
-1.0
-.5
0.0
Factor 1
-9-
.5
1.0
Factor 1 (F1): View of internationalization
Factor 1 shows:
• positive correlation with the "international taxation" and "foreign currency management"
variables, and to a lesser extent, with the "managerial accounting" variable;
•negative correlation with the "comparative accounting practices" variable.
In terms of content, it marks the contrast between works on multinational accounting and works
on comparative accounting practices. The former cover problems inherent to the
internationalization of accounting systems common to most countries, while the latter examine
differences between national accounting systems.
Factor 2 (F2): The generalization (non specialization) factor
Factor 2 shows:
•positive correlation, principally with the "harmonization/international standards" variable, and to
a lesser degree with the "general presentation", then the "classification of financial reporting
practices" variable;
•negative correlation with the "auditing" variable.
These variables never exceed 15% of the total pages in a sample publication.
This factor reflects the fact that no particular subject dominates within the publication, and/or that
the publication covers essentially general subjects: general presentation, classification of practices
and international standardization. It therefore separates the non-specialized works from the
others.
Factor 3 (F3)
Factor 3 shows:
•positive correlation with the "financial reporting and disclosure" variable;
•negative correlation with the "international financial statement analysis" variable.
- 10 -
In terms of content, it marks the contrast between foreign financial statement analysis and
problems relating to financial reporting and disclosure. The books studied cover the differences
between financial statements in one of two mutually exclusive ways:
•either from the angle of methods and volume of information disclosed;
•or from the angle of financial statement analysis.
6.1.2 Classification of works studied
A joint analysis of diagrams 2 and 3 results in classification of the books in three groups.
Diagram 2
RELATIVE IMPORTANCE OF THEMES
Position of textbooks in reltion to Factor 3 and 1
2.0
B elkao ui
Evans
1.5
1.0
Cho i
M ueller
Iq b al
A lhashim
Rad eb aug h
.5
0.0
A lexand er
,
Zamb o n
-..5
No b es
B lake
Lawrence
Camp ed elli
Ques ad a
Ob ert
REGR.
-1.0
factor
score 1
for
analysis 1
-1.5
-2
-1
0
1
REGR facto r sco re 2 for analysis 1
- 11 -
2
3
4
Diagram 3
RELATIVE IMPORTANCE OF THEMES
Position of textbooks in relation to factor 3 and 1
2 .0
Belkao ui
Evans
1.5
1.0
Cho i
M ueller
Iq b al
.5
A lhas him
A lexand e r
Rad eb aug h
0 .0
Zamb o n
-.5
No b es B lake
Ob ert
Lawre nce
-1.0
Camp ed elli
REG.
factor
score 1 for
analysis 1
Ques ad a
-1.5
-2 .0
-1.5
-1.0
-.5
0.0
.5
1.0
1.5
2 .0
REGR factor score 3 for analy sis 1
Table 8: Classification of works studied with reference to relative importance of themes
covered8
Group 1
Belkaoui
Choi
Evans
Mueller
Group 2
Blake
Campedelli
Lawrence
Nobes
Quesada
Obert
Group 3
Alexander
Alhashim
Iqbal
Radebaugh
Zambon
Group 1: works on international accounting
The works of Belkaoui, Choi, Evans & Mueller treat accounting from a transnational point of
view. Their factor 2 coordinates are well into the positive (diagram 2). Comparative accounting,
in their books, has a relatively less important position than in the other works studied: less than
20% of pages. International managerial accounting issues occupy a prominent position, ranging
from 35% for Mueller to more than 60% for Belkaoui and Evans.
Auditing is approached either only marginally as by Choi and Evans (7% of pages), or not at all
by the others. General themes represent a relatively significant portion of the total, from 14% for
Evans to 24% for Belkaoui and Mueller.
- 12 -
Similarly, Mueller devotes 21% of his pages to disclosure, and Belkaoui allocates 14% to
comparative financial analysis.
Group 2: works on comparative accounting
This group comprises books where the majority, that is more than 50% of discussion, concerns
comparison of national accounting practices in different countries, and there is no independent
reference to transnational accounting. Four books devote more than two thirds of their pages to
comparisons of accounting practices in different countries, and never more than 20% to another
theme: they are the works of Blake (66%), Campedelli (76%), Lawrence (80%) and Nobes
(69%).
The works of Obert and Quesada cover not only comparative practices, which occupy 50% and
55% respectively of their pages, but also the themes of financial reporting and disclosure, which
occupy 25% for Obert and 34 % for Quesada.
General themes are not neglected. They represent more than 20% of the works of Blake,
Campedelli and Nobes.
Group 3: general works
The other books take a "mixed" approach: neither "international multinational" accounting, nor
comparisons between the practices in different countries, have a dominant position, except in the
works of Alhashim and Radebaugh, which allocate a non-negligible place to comparative
accounting practices, with 25% and 28% of pages respectively. The books by Alexander and
Iqbal devote more than 20% of their pages to international financial statement analysis.
Nevertheless, these four works are classified as "general” because no subject other than those
mentioned above exceeds 15% of the total. Zambon’s book also belongs to this group, since 90%
of its pages cover matters of a general nature.
The classification based on themes thus reveals two "typical patterns" in the selected international
accounting works. However, there are five "mixed" works, and as a result, in a second stage, the
themes are grouped a priori so as to accentuate the trends.
- 13 -
6.2 Table 7 - relative importance of approaches
6.2.1 The factors
Two factors explain almost 95% of the distribution. The most discriminant factor accounts for
75% of the distribution.
Diagram 4
RELATIVE IMPORTANCE OF APPROACHES
Position of approaches in relation to factor A and B
1 .0
Financial accounting
Accounting information utilization
.5
Descriptive/comparative approach
Number
0 .0
Accounting information production
Managerial accounting
-.5
Accounting dimension
of multinational enterprises
Factor B
-1.0
-1.0
-.5
0.0
.5
1.0
Factor A
Factor A: "global" or "local" approach
Factor A shows:
• positive correlation with the following variables: number, multinational dimension of
enterprises, managerial accounting;
•negative correlation with the following variables: descriptive-comparative approach, financial
accounting.
The "financial accounting" and "descriptive-comparative approach" variables, and the
"multinational dimension of enterprises" and "managerial accounting" variables have, respectively,
- 14 -
the same coordinates in relation to the two factors. Their similarity reflects the existence of two
groups of publications: works on "international multinational" accounting and works on
comparative financial accounting.
Factor B: whether the approach is strongly focused on information production
Factor B shows:
•positive correlation with the “accounting information utilization” variable;
•negative correlation with the “accounting information production” variable.
The relative share of contents allocated to production of accounting information is much larger
than the space allotted to the utilization of this information. More than half the works studied
devote at least three quarters of their discussions to accounting information production, and no
book, except that by Mueller, allocates less than 66% to this area. The result is logical, since the
sample essentially comprises works which mainly concern financial accounting. Consequently,
factor B allows us to discriminate, among the works oriented towards production of accounting
information, between those which devote a non-negligible section to the utilization of financial
statement, and those which do not.
6.2.2 The textbooks.
Two families can now be identified.
Table 9: Classification of works by approach
Family A
Subfamily 1
Belkaoui
Choi
Evans
Family B
Subfamily 2
Alhashim
Iqbal
Mueller
Radebaugh
Subfamily 1
Blake
Campedelli
Lawrence
Nobes
Quesada
Zambon
- 15 -
Subfamily 2
Alexander
Obert
Diagram 5
RELATIVE IMPORTANCE OF APPROCHES
Position of textbooks in relation to factor A and B
2
Factor B
Quesada
Mueller
Iqbal
1
Obert
Lawrence
Alexander
Radebaugh
Factor A
0
Nobes
Alhashim
Choi
Zambon (a)
Belkaoui
Blake
-1
Evans
-2
REG.
factor score 2
for analysis 1
-3
-1.5
-1.0
-.5
0.0
.5
1.0
1.5
REGR facto r sco re 1 for analy sis 1
(a) Campedelli and Zambon have identical coordinates
Family A: works on international managerial accounting
This first family of works consists of those which devote more than 20% of their pages to
managerial accounting and cover more than 7 themes. They are divided into two "subfamilies",
according to the relative portion allocated to managerial accounting. The first of these subfamilies
comprises works containing a large proportion of managerial accounting discussion. They are the
books by Belkaoui (46%), Evans (43%) and Choi (35%). The second subfamily consists of works
allocating between a quarter and a third of their contents to managerial accounting: Alhashim,
Iqbal, Mueller and Radebaugh.
Family B: the "comparative" works
Family B comprises works which essentially cover financial accounting and accounting
information production.
- 16 -
A secondary criterion is applied to separate the purely "comparative" works from the others. In
the former, more than 90% of the contents relate to international comparisons. The books by
Alexander and Obert, which are introductory textbooks, stand alone.
7 - DEFINITION OF INTERNATIONAL ACCOUNTING BY THE AUTHORS
The different approaches already described are evidence that a certain variety of viewpoints
exists. We wanted to compare our analyses with the definitions of international accounting given
by the authors themselves. Having studied their prefaces, forewords, introductions and/or initial
chapters, we noted that only rarely did an author state a precise definition of international
accounting. The table below summarizes our findings:
Table 10: Inclusion or otherwise of a definition of international accounting
Title (authors)
A European Introduction to Financial Accounting (Alexander & Nobes)
International Dimensions of Accounting (Alhashim & Arpan)
International & Multinational Accounting (Belkaoui)
European Accounting (Blake & Amat)
Ragioneria Internazionale (Campedelli)
International Accounting (Choi & Mueller)
International Accounting & Reporting (Evans, Taylor & Holzmann)
International Accounting - A Global Perspective (Iqbal, Melcher & Elmallah)
International Accounting (Lawrence)
Accounting - An International Perspective (Mueller, Gernon & Meer)
Comparative International Accounting (Nobes & Parker)
Pratique internationale de la comptabilité et de l'audit (Obert)
International Accounting & Multinational Enterprises (Radebaugh & Gray)
Normativa contable internacional (Quesada, Blanco & Gonzalez)
Profili di ragioneria internazionale e comparata (Zambon)
Definition included
No
No
Yes
No
Yes
Yes
Yes
Yes
Yes
No
No
No
Yes
No
Yes
7.1 Works without a definition of international accounting
There are several possible explanations for the non-inclusion of a definition. The most probable
reason is that for the authors, international accounting as such does not exist, but is in fact
financial or managerial accounting with international aspects caused by the internationalization of
the economy.
Seen in this light, the book titles become highly significant:
•D. Alhashim and J. Arpan (1992) title their book "International Dimensions of Accounting",
clearly not "international accounting".
- 17 -
•Similarly, G. Mueller, H. Gernon & G. Meek (1994) take as their title: "Accounting - An
International Perspective", showing that once again the basic subject is accounting, rather than
international accounting.
•R. Obert’s title is "International practices in accounting and auditing" ("Pratique internationale
de la comptabilité et de l'audit"): the subject is accounting, treated from an international angle.
•Finally, the title of the book by D. Alexander and C. Nobes (1994) - "A European Introduction
to Financial Accounting" - clearly indicates that it covers financial accounting from a European
angle.
7.2 Works including a definition
These authors can be considered as either implicitly or explicitly believing that international
accounting is a subject in its own right.
Three publications9 begin by referring to three approaches to international accounting defined by
T. R. Weirich, C. G. Avery and H. R. Anderson10: (1) a universal system, (2) a comparative
system, and (3) accounting for subsidiaries.
In addition, several authors give their own definitions, which are worth quoting here. According
to F. Choi and G. Mueller (1992, p. 12), international accounting extends general-purpose,
nationally oriented accounting in its broadest sense to: (1) international comparative analysis, (2)
accounting measurement and reporting issues unique to multinational enterprises, (3) accounting
needs of international financial markets, and (4) harmonization of worldwide accounting and
financial reporting diversity via political, organizational, professional, and standard-setting
activities.
For A. Belkaoui (1994, p. 12), these new environmental factors of (1) the global economy, (2)
the international monetary system, (3) the multinational corporation, and (4) foreign direct
investment, have created an environment in which business transactions, their conduct,
measurement and disclosure, take new and distinctive forms that call for a specific accounting
subdiscipline. That accounting subdiscipline is international accounting.
The definition of international accounting, like its field of application, undergoes frequent changes
in order to adapt to changing contexts, needs and expectations. International accounting takes in
all the technical accounting problems in financial, managerial, tax and auditing areas that have a
bearing on the conduct, measurement and disclosure of foreign operations. There are issues
- 18 -
relevant to international business which create special accounting problems and specific solutions
that differ from the solutions adopted in a domestic context.
In the words of T. Evans, M. Taylor and O. Holzmann, international accounting, which includes
both financial and managerial accounting, is defined as accounting for international transactions,
the operations of international firms, and comparisons of accounting principles and practices
found in foreign lands and the procedures by which they are established.
According to M. Iqbal, T. Melcher and A. Elmallah (1997, p. 2), international accounting is
defined as accounting for international transactions, comparisons of accounting principles in
different countries, and harmonization of diverse accounting standards worldwide. This definition
encompasses the operational needs of the accountant in financial, managerial, tax, auditing, and
other areas of accounting.
For S. Lawrence (1996, p. 1), a short definition could concentrate on the two words
"international" and "accounting". The former can be defined as "concerning or involving two or
more nations or nationalities" and the latter "the process of recording, analyzing and reporting
financial information so as to maximize the value of the information produced". Thus international
accounting is simply the "process of providing useful financial information viewed on a
multinational basis".
As we see from this comparison, each of these definitions is closely linked to the contents of its
author’s book. That may appear obvious, but it does mean they cannot supply a sufficiently clear
view of the relative importance enjoyed by each approach to international accounting. It is
therefore necessary to refer to the tables and categories described earlier.
CONCLUSION
Among other observations, our statistical analysis revealed the dual nature of textbook
approaches to international accounting. There is one group of textbooks covering the accounting
aspects of company internationalization, with a "monistic" view of accounting systems, in other
words one which considers financial accounting and management accounting together; these
books are concerned with the accounting dimensions, in the broadest sense, of multinational
corporations. Then there is a second group of textbooks which take a country-by-country
approach, and seek to highlight the differences between countries. Problems relating to the
internationalization of accounting frameworks are dealt with locally, on a national level. It is true
that a few books have a "mixed" approach, but they remain clearly affiliated to one of these two
groups.
- 19 -
Can the existence of a link between a book’s membership of family A or family B (in table 9) and
the author’s institution of education be pure coincidence? One thing is clear: the first group of
books (family A) are written by authors teaching in the USA, while the second group (family B)
are written by European-based authors11.
APPENDIX 1 - LIST OF TEXTBOOKS SELECTED
ALEXANDER David and NOBES Christopher: A European Introduction to Financial Accounting. Prentice Hall
(UK), 1994, 460 pages.
ALHASHIM Dhia D. and ARPAN Jeffrey S.: International Dimensions of Accounting. PWS Kent (USA), 2nd
edition, 1992, 252 pages.
BELKAOUI Ahmed: International & Multinational Accounting. The Dryden Press (UK), 1994, 502 pages.
BLAKE John and AMAT Oriol: European Accounting. Pitman (UK), 1993, 237 pages.
CAMPEDELLI Bettina: Ragioneria Internazionale. G. Giappichelli Editore (Italy), 1994, 366 pages.
CHOI Frederick D.S. and MUELLER Gerhard G.: International Accounting. Prentice Hall (USA), 2nd edition,
1992, 610 pages.
EVANS Thomas G., TAYLOR Martin E. and HOLZMANN Oscar: International Accounting and Reporting.
South-Western Publishing (USA), 2nd edition, 1994, 536 pages.
IQBAL Zafar, MELCHER Trini & ELMALLAH Amin E. : International Accounting - A Global Perspective.
South-Western, 1996, 450 pages.
LAWRENCE Steve: International Accounting. International Thomson Business Press, 1996, 411 pages.
MUELLER Gerhard G., GERNON Helen and MEEK Gary K.: Accounting - An International Perspective. Irwin
(USA), 3rd edition, 1994, 200 pages.
NOBES Christopher and PARKER Robert (coordinated by): Comparative International Accounting. Prentice Hall
(UK), 4th edition, 1995, 494 pages.
OBERT Robert: Pratique internationale de la comptabilité et de l'audit. Dunod (France), 1994, 307 pages.
QUESADA SANCHEZ Francisco Javier, BLANCO GOMEZ Antonio and GONZALEZ GIMENEZ Raimundo:
Normativa contable internacional. Ediciones Ciencias Sociales (Spain), 1991, 435 pages.
RADEBAUGH Lee H. and GRAY Sidney J.: International Accounting and Multinational Enterprises. John Wiley
& Sons (USA), 3rd edition, 1993, 582 pages.
ZAMBON Stefano: Profili di ragioneria internazionale e comparata. Cedam (Italy), 1996, 267 pages.
APPENDIX 2 - LIST OF PUBLICATIONS NOT INCLUDED IN SAMPLE
1 - Textbooks
FOX Samuel and RUESCHOFF Norlin G. : Principles of International Accounting. Austin Press (USA), 1986.
HOLZER H. Peter (coordinated by) : International Accounting. Harper & Row (USA), 1984, 524 pages.
- 20 -
2 - Reference works
ALEXANDER David and ARCHER Simon (coordinated by) : The European Accounting Guide. The Academic
Press (UK), 2nd edition, 1995, 1570 pages.
Coopers & Lybrand : International Accounting Summaries. John Wiley (USA), 2nd edition, 1993 , 1000 pages
approx.
KLEE Louis (directed by) : La comptabilité des sociétés dans la C.E.E. La Villeguerin éditions, 1992, 664 pages.
LEQUIN Yves : Principes comptables européens. Sedifor (Éditions d'Organisation), 1994, 189 pages.
Nexia International : The International Handbook of Financial Reporting. Chapman & Hall, 1993, 411 pages.
MAZARS SA (directed by) : Comptabilité dans les principaux États de la CEE. Delmas, 1993, 383 pages.
3 - Research and anthologies
BELKAOUI Ahmed : International Accounting: Issues & Solutions. Quorum Books (USA), 1985, 364 pages.
BELKAOUI Ahmed : Judgment in International Accounting. Quorum Books (USA), 1990, 130 pages.
BLAKE John and HOSSAIN Mahmud : Readings in International Accounting. International Thomson Business
Press (UK), 1996, 397 pages.
CHOI Frederick D.S. and MUELLER Gerhard G. : Frontiers of International Accounting: An Anthology. Umi
Research Press (USA), 1985, 313 pages.
GRAY Sidney J. (directed by) : International Accounting and Transnational Decisions. Butterworth (UK), 1983,
500 pages.
GRAY Sidney J., COENENBERG Adolf O. and GORDON Paul D. : International Group Accounting. Routledge,
2nd edition, 1993, 435 pages.
SAMUELS John M. and PIPER A.G. : International Accounting: A survey. Croom Helm (UK), 1985, 197 pages.
4 - Case studies
SCHWEIKART James A., GRAY Sidney J. and ROBERTS Clare B. (coordinated by) : International Accounting A Case Approach. McGraw-Hill (USA), 1st edition, 1994, 587 pages.
APPENDIX 3 - LIST OF TOPICS
Conover, Salter, and Price
(International Accounting Education: A Comparison of Course Syllabi ad CFO Preferences
Issues in Accounting Education Vol. 9, No. 2, Fall 1994)
1
2
3
4
5
6
7
8
9
10
11
Introduction and definition of international accounting
Classification of financial reporting practices (systems)
Description/comparison of financial reporting practice by countries (down to specific level)
Description/comparison of financial reporting practice by issue (LIFO, pension, etc.)
Description/comparison of financial reporting practice by measurement/disclosure continuum
Description/comparison of financial reporting practice by analyzing foreign financial statements
Comparison/description of countries by institutional framework
The measurement disclosure debate
Harmonization and financial markets
The institutional framework of harmonization/IASC standards
Foreign exchange-markets
- 21 -
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
Foreign exchange-basics, products, terminology, and mechanics
Accounting for foreign exchange transactions
Accounting for foreign exchange translation (SFAS No. 52)
Foreign exchange risk management
Capital budgeting in multinational enterprises
International auditing (internal)
International auditing (external)
International auditing (the international auditing firm)
The foreign Corrupt Practices Act
Systems of taxation outside the U.S.A.
Taxation-U.S. taxation of foreign income
Taxation-transfer pricing
Management accounting issues
Accounting information systems issues (MIS)
Accounting for inflation (cross-national comparisons)
Capital markets effects of international accounting diversity)
Environmental influences on accounting systems and practices
Segmental reporting
History of international accounting
Ethics in international accounting
Accounting for social and environmental issues
The role of accounting in economic development
Other (specify)
1
Foreword to Comparative International Accounting. C. Nobes and R. Parker, Prentice-Hall, 3rd edition, 1991, p.
XIII.
2
Op. Cit., preface p. XIII.
3
This could have been the subject for separate research.
4
This is not a value judgement; these works are extremely precious resources.
5
This list is taken from the article by T. Conover, S. Salter and J. Price : "International Accounting Education: A
Comparison of Course Syllabi and CFO Preferences" (Issues in Accounting Education Vol. 9, No. 2, Fall 1994).
6
Op. Cit., p. 3.
7
This table has a 0% significance level, i.e. it assumes that a theme is absent if it is not considered at all. Another
approach could have been to treat a theme as absent if the number of pages allocated to it were equal to or less
than a certain percentage, for example 3%, of the total book.
8
Only the first author’s name is quoted.
9
F. Choi, A. Belkaoui and J. Samuels (not included in the sample).
10
Weirich, Thomas R., Avery Clarence G. and Anderson, Henry R. (1971): International Accounting: Varying
Definitions. International Journal of Accounting, autumn, pp. 80-81.
11
The only exception is the textbook by L. Radebaugh and S. Gray : it should be pointed out that S. Gray teaches
in the UK. Furthermore, the first two editions of this book were published by a different pair of authors, L.
Radebaugh and J. Arpan, both working in the USA. Although S. Gray has no doubt left his mark on the third
edition, our statistical analysis shows that this book, which belongs to family A, is influenced by American
teaching practices.
- 22 -