International Accounting Software Issues

Pages16-17
DOIhttps://doi.org/10.1108/EUM0000000001424
Published date01 February 1990
Date01 February 1990
AuthorBill Cadogan
Subject MatterEconomics,Information & knowledge management,Management science & operations
16 INDUSTRIAL MANAGEMENT & DATA SYSTEM 90,2
T
o rise to the challenge of 1992, British
business must develop an accounting and
management information strategy geared
to effective competition.
International
Accounting
Software
Issues
Bill Cadogan
The
1987
debut of
the
Single European Act
may have
been
quiet but the pace of change is now accelerating. The
vision of
a
single market of 320 million consumers spread
across 12 countries is turning into a reality as Europe
opens for business. For some that vision goes further,
to a Europe that
will
operate as a single economic or even
political entity. But, for
now,
that vision is limited to the
progressive removal of the principal internal barriers to
trade due for completion by the end of 1992.
Whilst the more overt barriers to trade are being removed,
in an effort to equalise the ability for companies to compete
on a truly European scale, many of the obstacles relating
to national accounting and financial reporting practices will
remain. Inevitably the most effective solutions to these
remaining obstacles will be computer-based and
software-driven.
If British business is to rise to the challenge of 1992, it
will need to develop an underlying accounting and
management information strategy geared to effective
competition. The development of such a strategy is an
extremely complex problem.
The differing statutory reporting requirements with regard
to accounting and financial matters in each country demand
a radical rethink
in
the
way
that they
have
been traditionally
tackled by the British software industry.
According
to
Mark Lane, Marketing Director of corporate
software company, Mega, the cause of the differences is
multifarious. "Differences of approach arise for many
reasons ranging from the power and influence of the
professional bodies and national taxation practices through
to the historical nature of corporate ownership and
whether or not the legal system for accounting purposes
is based on English style common law or Romanesque
codified
law.
The situation has been further complicated
by what can only be termed accidents of fate, such as the
adoption of
some
German accounting formats in the UK,
the heavy influence of Germans in the formation of the
French accountancy body and the current move by Spain
to consolidate their approach around the British system."
The manner
in
which the differences manifest themselves
is also multifarious. For example, in the UK, Ireland and
The Netherlands the traditional aim of accounting practice
has been to present a true and fair view as opposed to
a strict and faithful
picture.
Furthermore,
in many
countries
there is little or
no
requirement for audit and publication,
consolidation of
group
accounts is not always considered
necessary and asset valuation varies for a strict historical
cost in Germany to 1976 values in France and multiple
choice in the UK.
Difficult... to assess the
true performance of
subsidiaries, managers or
products located in different
countries
"With 1992, the present differences in approach around
Europe create potential problems in terms not only of
accounting software techniques but also of the provision
of meaningful management information," says Mark Lane.
"The differences can make it difficult for multinational
companies to assess the true performance of subsidiaries,
managers or products located in different countries as well
as consolidate and audit the activities of subsidiaries
because of
the
existence of different accounting rules and
practices."
With other
EEC
member countries already accounting for
around half of the UK's exports, and the progressive
nature of the unification policy, British business needs to
find a solution which not only gives greater management
flexibility and wider options for decision support but also
enables them to comply with the prevailing multiplicity
of accounting rules.

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT