Financial Statements and Accounting Standards

Accounting is sometimes referred to as the "language of business." Financial statements and accounting pronouncements are used by stakeholders in organizationsùshareholders, employees, creditors, investors, suppliers, customersùto evaluate a company's performance and potential. When companies were based in the same country as their stakeholders, following the accounting regulations of that country provided few problems. Standards were necessaryùparticularly for publicly traded companiesùto ensure that comparisons could be made among different companies while the same "definitions" were in place for the "language" of business regardless of who prepared financial statements. As business has become increasingly global, however, the differences in standards among various countries has become more obvious and, in some cases, troublesome. The United States has general accepted accounting principles that apply to its publicly-traded companies; because of the size and complexity of the American market, these standards have also been implemented in other countries, as well. In Europe, however, different national standards have remained in place until 2005, when a single standard was imposed on European companies. This research considers the importance of financial statements in general, the international standards imposed by the European Union, whether Quaccess should adopt these international standards, and wheth

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anies based in the United States, companies with headquarters in EU nations have long prepared financial statementsùincluding balance sheets and profit/loss statementsùfor their shareholders. However, there has been no single standard across the various nations. While differences tended to be subtle, they could nonetheless result in material differences in reporting depending on which standard was used. The introduction of a single currencyùthe euroùmade it easier for capital to flow across international boundaries in Europe, and the need for financial statements that would also be standardized increased ("EU Regulations" n.p.). Various stakeholders are eager to see a unified set of standards in place. This will enable stakeholdersùcreditors, investors, suppliers, employeesùto compare companies across Europe without regard to the national standards to which these companies might have otherwise reported. In this way, a German company can be compared to a French company or a Dutch company without concern that there might be significant differences in their financial information based on different national accounting standards. Given that the EU is a larger economic market than the United States, when taken as a whole, and tha
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Some common words found in the essay are:
STATEMENTS American, EU Regulations, SEC FASB, European Union, INTRODUCTION Accounting, Quaccess American, STANDARDS Governments, CONCLUSION International, Instead American, financial statements, international standards, European American, accounting standards, american company, international accounting standards, european companies, european union, accounting principles, international accounting, balance sheet, income statement, confidence financial statements, financial statements companies, adopt international standards, international financial reporting,
Approximate Word count = 2466
Approximate Pages = 10 (250 words per page)

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