Accounting in The Third World
Britt Meyer
Acc 303
Abstract
Accounting in the Third World
The most fundamental accounting principles such as double entry, accrual accounting and simple financial statement preparation are used in all levels of economic developed countries, even third world countries. Although these methods and principles are used in developing countries, the reliability and sophistication greatly vary in their reports. There is a correlation between accounting standards and procedures and the degree of social and economic development. Developing countries share similar characteristics when it comes to their accounting systems, such as attitude towards accounting, education and historic background.
Without reliable accounting in third world countries, many business investments and opportunities are hesitated or not completed. Taxation is also another issue raised in developing countries and their accounting procedures. Additionally there are many problems and issues being raised with accounting in developing countries. Awareness needs to be raised to help third world countries develop a better accounting system. It would be beneficial if the accounting practices and training that has been available to developing countries can contribute and be put to actual use.
Accounting began with recording methods that were rather very simple, however accounting has developed and expanded over the years to incorporate worldwide sets of accounts. The suppliers of accounting services have improved from the scribes of early civilizations to technology advanced programing, worldwide accountants. Early accounting development was slow, reflecting the small scale and slow pace of early economic activity.
Unfortunately many underdeveloped countries are still stuck in the early days of accounting, suffering trying to keep up and maintain connections with businesses today. If these countries were provided the education and knowledge to update their outdated accounting techniques, would this help increase business and improve the economy or waste time of the educators? This has been debated for decades, whether or not it would be worth current and technology advanced accounting systems to be taught in developing countries. Time and money, of course, are major factors; would these countries actually be able to make such a major switch from old to new and understand it? Would it take longer than expected to free them from their old habits?
Although this issue raises many questions that will change many views of whether we should educate these countries and update their accounting principles, it will help increase international businesses and economic development. It is just a matter of to what extent? There are more factors that play into this, rather than just a lack of education. Lack of money is a huge factor, without computers that can support the specific software we use to decrease work hours and organize accounts, can be very challenging and time consuming. Taxation also plays a major role in why underdeveloped countries are not using current accounting techniques or systems. Of course this now traces to politics and if these countries had a different government, they would not be in this ghastly situation.
There are many ways to help change third world countries accounting principles, techniques and systems. First off, awareness needs to be raised, without it nothing will ever be done. Next it will either come down to apolitical war within the country, or have the United States help fight these countries' governments and change it into a democracy or anything else aside from a dictatorship or communism. Education will also need to be done to help eliminate the old methods and bring in the new. Taxation will be needed to afford educators, or a volunteer program is possible, but probably won't raise enough awareness or knowledge. It is very important for third world countries to develop reliable accounting, otherwise many businesses will fail, and the economy can fall into a deep recession that may take decades to recover from.
References
McKee, D.L. (1992) Accounting Services The International Economy, and Third World
Development. Praeger Publishers.
Siegel, J.G. & Shim, J.K.(2006) Accounting Handbook . Barron's Educational Series
Wallace, R.S. Olusegan. (1991) Research in Third World Accounting . JAI Press Inc
Acc 303
Abstract
Accounting in the Third World
The most fundamental accounting principles such as double entry, accrual accounting and simple financial statement preparation are used in all levels of economic developed countries, even third world countries. Although these methods and principles are used in developing countries, the reliability and sophistication greatly vary in their reports. There is a correlation between accounting standards and procedures and the degree of social and economic development. Developing countries share similar characteristics when it comes to their accounting systems, such as attitude towards accounting, education and historic background.
Without reliable accounting in third world countries, many business investments and opportunities are hesitated or not completed. Taxation is also another issue raised in developing countries and their accounting procedures. Additionally there are many problems and issues being raised with accounting in developing countries. Awareness needs to be raised to help third world countries develop a better accounting system. It would be beneficial if the accounting practices and training that has been available to developing countries can contribute and be put to actual use.
Accounting began with recording methods that were rather very simple, however accounting has developed and expanded over the years to incorporate worldwide sets of accounts. The suppliers of accounting services have improved from the scribes of early civilizations to technology advanced programing, worldwide accountants. Early accounting development was slow, reflecting the small scale and slow pace of early economic activity.
Unfortunately many underdeveloped countries are still stuck in the early days of accounting, suffering trying to keep up and maintain connections with businesses today. If these countries were provided the education and knowledge to update their outdated accounting techniques, would this help increase business and improve the economy or waste time of the educators? This has been debated for decades, whether or not it would be worth current and technology advanced accounting systems to be taught in developing countries. Time and money, of course, are major factors; would these countries actually be able to make such a major switch from old to new and understand it? Would it take longer than expected to free them from their old habits?
Although this issue raises many questions that will change many views of whether we should educate these countries and update their accounting principles, it will help increase international businesses and economic development. It is just a matter of to what extent? There are more factors that play into this, rather than just a lack of education. Lack of money is a huge factor, without computers that can support the specific software we use to decrease work hours and organize accounts, can be very challenging and time consuming. Taxation also plays a major role in why underdeveloped countries are not using current accounting techniques or systems. Of course this now traces to politics and if these countries had a different government, they would not be in this ghastly situation.
There are many ways to help change third world countries accounting principles, techniques and systems. First off, awareness needs to be raised, without it nothing will ever be done. Next it will either come down to apolitical war within the country, or have the United States help fight these countries' governments and change it into a democracy or anything else aside from a dictatorship or communism. Education will also need to be done to help eliminate the old methods and bring in the new. Taxation will be needed to afford educators, or a volunteer program is possible, but probably won't raise enough awareness or knowledge. It is very important for third world countries to develop reliable accounting, otherwise many businesses will fail, and the economy can fall into a deep recession that may take decades to recover from.
References
McKee, D.L. (1992) Accounting Services The International Economy, and Third World
Development. Praeger Publishers.
Siegel, J.G. & Shim, J.K.(2006) Accounting Handbook . Barron's Educational Series
Wallace, R.S. Olusegan. (1991) Research in Third World Accounting . JAI Press Inc
