h principles are, at present, different in the various nations around the world are based, in large part, on the cultural values of the societies within which they have been developed (Salter, 1995). Thus, within a global context, accounting principles may be said to reflect national accounting practices even if within those national accounting environments, accounting principles are held to represent a foundation of fundamental premises that both underlie and determine sound accounting practice.
When considered within a global context, therefore, the issue of the appropriate philosophical basis for accounting principles becomes more complex. If the appropriate philosophical basis for accounting principles is "what is generally done in practice," then whose national practices will be the one to serve as the global model? Conversely, if the appropriate philosophical basis for accounting principles is to be "a foundation of fundamental premises that both underlie and determine sound accounting practice," then which set of national fundamental premises will serve as the global model?
The issue of the appropriate philosophical basis for accounting principles, thus, may be addressed in either of two dimensionsùnational or global. A focus on the national dimension could be defended prior to 1985 or 1990. During the decade of the 1990s, however, it has become increasingly difficult to support a national focus as the forum of discussion. Conducting the discussion within the context of a global focus, however, has been impeded by the juxtaposition of conflicting national formulations of generally accepted accounting principles. In the contemporary international business environment, therefore, it is necessary to consider the issue of the appropriate philosophical basis for accounting principles from the perspectives of both a national focus and a global focus.
Financial accounting is concerned with recording the actual financial...