Critically discuss SIX causes of differences in accounting practices used in different countries. You must discuss, with relevant examples, how a particular factor contributes to or leads to a particular difference in accounting practices.

Six causes of differences in accounting practices used in different countries is explained below with detail explanation.

Explanation:

The following are six problems of the variation in Accounting practice practiced in different nations.

Legal System :

The legal system of a nation performs an essential role in the development of Accounting policies.

Taxation :

In some countries, Accounting and Taxation are dependent on each other. Whereas in other countries they are independent.

Inflation :

Inflation doesn't remain the same for every country. Uniform accounting practice cannot be followed because of this reason.

Cultural Differences/Diversity :

Cultural diversity plays a pivotal role in the Accounting practice of each country. Cultural practices lead to different practices being followed across the globe.

Environmental Factors :

Many countries have started to incorporate environmental Accounting in their financial statements.

answer; foreign exchange transaction;

answer; synthetic production system;