Article Analysis, European Accounting

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"How U.S. and European Accounting Practices Differ" appeared in 1986 and identifies differences among four European nations and the United States with regard to accounting standards and practices. Based on these differences, the authors call for more rapid adoption of international accounting standards. The article is well-written and thoughtfully presented, and the arguments for an international standard take into account both the benefits of such a standard and the difficulty in achieving it. However, the article's age makes some of the information outdated, and the lack of information on Japan, China or the Soviet Union limits its use as a survey of accounting practices.

In the United States, accounting practices are governed by the Federal Accounting Standards Board (FASB), and professional accounts are certified by the Certified Public Accountant (CPA) exam. Although the article was written in 1986, it has relevance today, perhaps even more relevance than when it was written. In the intervening years, multinational corporations and companies which are doing business in the international arena have increased. In addition, the revolution in communications and computer technologies since the mid-1980s has increased the demand for international capital investment, and trading in international stocks has increased during this time as well. Because of this heightened interest in investment opportunities on the international level, co

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require a college degree before they can be tested (Doost and Ligon, 1986, p. 57). Based on the information contained in the article, Doost and Ligon are targeting nonaccounting readers rather than professional accountants. This deduction can be derived from the type of information which the authors include and the way in which it is presented. If accountants were the target audience, one would expect to see specific FASB regulations cited and specific GAAP sections noted. Instead, the authors discuss differences between GAAP and FASB regulations with regard to European accounting practices in only a general style without specifically citing the actual section or paragraph. This target audience is important in that it makes the authors' call for harmonization among account practices more interesting. If the target audience were accounting professionals, one would understand a call for international standardization since it would be the professional accountants who are in a position to bring about changes in accounting practices. However, since the audience is apparently nonaccounting oriented, the call for standardization is intended to bring pressure to bear on the Securities and Exchange Commission (SEC) and other govern
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Approximate Word count = 1505
Approximate Pages = 6 (250 words per page)

Article Analysis, European Accounting

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