Free Accounting Dissertations - A Tax Regulation Was Also Introduce To Bring The Tax Return Format In Line
A tax regulation was also introduce to bring the tax return format in line with PCG format to bring the total accounting system in conformity with PCG chart based system.
The system was deliberately kept simple for easy use and transparency of accounting. These PCGs relied on a system of account codes. The enterprise accountant only has to classify all transactions according to the nature of expense into its account code. Inserting this information into the prescribed forms could then generate the financial statement.
The reason for wide scale acceptance of PCG format are its simplicity, training and schooling of accountants in the system from the very beginning and a broad familiarity of all accounting and tax professionals in the format.
Comparison of French Accounting with UK and USA
The accounting systems in countries have remained substantially different. The accounting professional of one country are expected to undergo substantial training and pass conversion examinations before being allowed to practice in their profession in another country. Requirement for qualified auditors are more stringent in France and UK then in USA.
In France, the government sets the standard, while in UK and US accounting bodies determine the formats and procedures. The inflation accounting is also different in all three countries. In France the managers could face prosecution if the company they manage goes bankrupt while US and UK managers have to be found fraudulent to face the same fate. French system does not practice deferred tax while the other two have this provision.
Benefits of Harmonization
France is a part of EEC and it is important for members of a single economic community to have uniform accounting procedures. An International Financial Reporting Standard (IFRS) is now being used for promoting harmony in international accounting. EEC has been at the forefront of IFRS and all member states were expected to conform to this standard by 2005 [Ernst & Young, 2005].
An international harmonization in accounting would be beneficial in the global economy. Multinational corporations will benefit from uniformity of financial accounting and reporting. The international investor will also benefit from the common terminology and accounting practices.
Developed countries have evolved an advance system of accounting best suited to their needs. They can rightfully be proud of these systems. The problem is that a sense of pride in their accounting system is likely to be a major hurdle in any attempt to harmonize the procedures.
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