THE DEFINITION OF INTERNATIONAL ACCOUNTINGTHROUGH TEXTBOOK CONTENTS

Dr. Hervé Stolowy

HEC School of Management (Groupe HEC)Department of Accounting and Management Control

1, rue de la Libération78351 - Jouy en Josas Cedex - France

Phone: +331 39 67 94 42Fax : +331 39 67 70 86

E-mail: stolowy@gwsmtp.hec.fr

For Presentation at the 8th World Congress of the

INTERNATIONAL ASSOCIATION FOR ACCOUNTING EDUCATIONAND RESEARCH (IAAER)

Paris, France, October 23-25, 1997

Second draft (January 31, 1997)May not be quoted or used without permission. Review comments welcomed. Please contact theauthor._____________________________________________________________________________Acknowledgments. The works referred to in this report were studied by the author and by Véronique N'Guyen andPhilippe Touron, students on the HEC doctoral program at the School’s Department of Accounting andManagement Control. The study is based on a comparative table, developed after consulting several experts in thefield, to whom we extend warm thanks: David Alexander, University of Hull (UK), Frederick Choi, New YorkUniversity (USA), Gary Meek, Oklahoma State University (USA), Christopher Nobes, University of Reading(UK), Robert Parker, University of Exeter (UK), Lee Radebaugh, Brigham Young University (USA), StevenSalter, University of Cincinnati (USA), Stefano Zambon, University of Padua (Italy).

Particular thanks go to Michel Tenenhaus, Professor at the HEC Group, who supplied valuable help in statisticalprocessing of data, for which we were assisted by Philippe Touron.

We should also like to thank Michel Lebas, Professor at the HEC Group, who reviewed a first draft of this paperand contributed to its improvement. However, responsibility for the results and opinions expressed remains solelyand entirely with the author.

Finally, we wish to thank Ann Gallon, for her much appreciated help in preparing the English language version ofthis paper.

THE DEFINITION OF INTERNATIONAL ACCOUNTINGTHROUGH TEXTBOOK CONTENTS

ABSTRACT

In the last twenty-five years, international accounting has developed significantly, and this is reflected in theparticularly wide range of literature published on the theme. But there is a paradox: we have noted that althoughmany works referred to factors that have had an internationalizing influence on accounting, few of them gave anyreal definition of the concept of international accounting. Furthermore, there is no one single definition ofinternational accounting, and several ideas currently co-exist.

This study aims to identify the field of international accounting by reference to a sample of European andAmerican textbooks on the subject. It should further our knowledge of the way in which international accountingis approached in these textbooks, and enable academics to assess their position in relation to the variousapproaches currently used for international accounting education.

The methodology was as follows: (1) Establishment of a detailed bibliography of books on internationalaccounting; (2) Selection of a sample of publications; (3) Definition of a table for analysis of the sample; (4)Application of the analysis table to the sample; (5) Classification; (6) Analysis of contents using the tables, basedon a principal component analysis; (7) Definition of international accounting by the authors; (8) Conclusion.

Among other observations, our statistical analysis revealed the dual nature of textbook approaches to internationalaccounting. There is one group of textbooks covering the accounting aspects of company internationalization, witha "monistic" view of accounting systems, in other words one which considers financial accounting andmanagement accounting together; these books are concerned with the accounting dimensions, in the broadestsense, of multinational corporations. Then there is a second group of textbooks which take a country-by-countryapproach, and seek to highlight the differences between countries. Problems relating to the internationalization ofaccounting frameworks are dealt with locally, on a national level. It is true that a few books have a "mixed"approach, but they remain clearly affiliated to one of these two groups.

Can the existence of a link between the group a book belongs to and its author’s institution of education be purecoincidence? One thing is clear: the first group of books are written by authors teaching in the USA, while thesecond group are written by European-based authors.

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INTRODUCTION - PRESENTATION

The development of international accounting

In twenty-five years, international accounting, as G. Mueller1 states, has outgrown its childhoodand adolescence to become a young adult, and its growth is reflected in the large quantity ofaccounting literature in the sphere. Why are researchers and academics so interested in this"discipline" ? There are several possible answers. F. Choi and G. Mueller2 point out that now atthe end of the twentieth century, a period shaped by the forces of global competition, operating,financing, and investing decisions are colored by their international implications. As many of thesedecisions are premised on accounting data, a knowledge of international accounting issues iscrucial for achieving proper interpretation and understanding in international businesscommunications.

Paradoxically, we have observed that although many publications referred to factors with aninternationalizing influence on accounting, few of them supplied any real definition of the conceptof international accounting. Furthermore, there is no one single definition of internationalaccounting, and several visions of the concept currently co-exist.

Objectives of the research

This research aims to identify the field of international accounting by reference to a sample ofEuropean and American textbooks on the subject. It should further our knowledge of the way inwhich international accounting is approached in these books, and enable academics to assess theirposition in relation to the various approaches currently used for teaching international accounting.

Methodology

Our goal is to identify the field of international accounting based on the themes covered bytextbooks on international accounting, and also their prefaces, forewords and introductorychapters.

The following methodology was applied: (1) Establishment of a detailed bibliography of books oninternational accounting; (2) Selection of a sample of publications; (3) Definition of a table foranalysis of the sample; (4) Application of the analysis table to the sample; (5) Classification; (6)Analysis of contents using the tables, based on a principal component analysis; (7) Definition ofinternational accounting by the authors; (8) Conclusion.

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1 - ESTABLISHMENT OF A DETAILED BIBLIOGRAPHY OF BOOKS ONINTERNATIONAL ACCOUNTING

Our bibliography was drawn up by consulting the following sources: (1) the HEC library database; (2) the University of Paris-Dauphine library data base; (3) the catalogues of the majorAmerican and British accounting publishers: Addison-Wesley, Chapman & Hall, Harcourt BraceProfessional Publishing - Academic Press, Irwin, John Wiley & Sons, McGraw-Hill, PrenticeHall, Routledge, South-Western Publishing, and The Dryden Press; (4) bibliographies from bookson international accounting (the "snowball" effect).

We were looking for publications with the following key words in their titles: (1) "accounting"and "international"; (2) "accounting" and "multinational"; (3) "accounting" and "Europe" (or"European"); (4) "reporting" and "international"; (5) "comptabilité" and "internationale"; (6)"comptabilité" and "Europe" (or "européenne" or "C.E.E." or "Union européenne"); (7)"principe(s) comptable(s)" and "Europe" (or "européenne" or "C.E.E." or "Union européenne");(8) "ragionaria" and "internazionale".

2 - SELECTION OF A SAMPLE OF PUBLICATIONS

Several books have been published in more than one edition, and it would have been interestingto examine developments in the way their authors approached international accounting as theyears passed3. This type of historical perspective would reveal which issues were emerging, andwhich declining. However, for the purposes of this study, we decided to examine the current stateof affairs, and only the most recent editions of the selected works were used.

Books on international accounting can be divided into four categories: (1) Textbooks, (2)Reference books (country-by-country presentation), (3) Published research or anthologies, and(4) Case studies.

This paper refers only to textbooks. We determined that it was not advisable to analyze referencebooks, whose main objective is to describe accounting practices in a certain number of countries.Moreover, these works are not always truly comparative accounting studies, as they often onlyallot a relatively small amount of space to comparison4.

For similar reasons, we eliminated from our sample publications relating to internationalaccounting but which represented research in the field, such as "Judgment in internationalaccounting" by A. Belkaoui (1990), "International Group Accounting", coordinated by S. Gray,A. Coenenberg and P. Gordon (1993), and "International Accounting: A Survey" by J. Samuels

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and A. Piper (1985). All of these are of great interest, but were eliminated as a result of ourdesire to study the way international accounting is viewed from an education standpoint, whichled to textbooks alone being selected for the final sample.

We are aware that our system of classification is debatable, as a "textbook" is a relative concept.Of course some research work, and even reference books (for example the collection directed byL. Klee - see appendix 2) can be used as a basis for teaching. In addition, American textbookshave a very standardized presentation - chapter objectives, chapter, questions, specificbibliography - whereas European textbooks, particularly French ones, do not generally includesuch headings.

For borderline cases, objective criteria had to be applied. It was thus decided to exclude all workswhich did not contain questions or a bibliography, and so we arrived at a sample of 15 bookspublished since 1990 (see appendix 1). The publications we did not select are listed in appendix 2.

3 - DEFINITION OF A TABLE FOR ANALYSIS OF THE SAMPLE

In order to define a table to analyze our sample and obtain comparable data, we sent a list of 34topics (see appendix 3) to 12 accounting academics and international accounting specialists,asking them to divide them into 10 or 12 main themes5. 8 answers were received, and 6 wereperfectly apt for use in the study. The following experts sent us their answers: David Alexander,University of Hull (UK), Frederick Choi, New York University (USA), Gary Meek, OklahomaState University (USA), Christopher Nobes, University of Reading (UK), Robert Parker,University of Exeter (UK), Lee Radebaugh, Brigham Young University (USA), Steven Salter,University of Cincinnati (USA), Stefano Zambon, University of Padua (Italy).

Several of our respondents remarked that the basic list was American in origin and therefore hada certain in-built bias, since many of the proposed topics were based on the American view ofinternational accounting. While in agreement, we believe that the effect can be counterbalanced,as the list of topics is very detailed, and quite capable of adaptation to a non-American context,particularly a European context. Furthermore, the sole aim of this list was to draw up a list ofthemes, not to apply the "American" list of topics to all the publications in the sample. Theclassifications received from respondents were relatively similar, except in the case of certaintopics which call for the following comments:

• Transfer pricing can be included in international taxation (in 2 of the 6 answers), in managerialaccounting (1 of the 6 answers), in both of these themes (1 of the 6 answers) or in a differenttheme (2 of the 6 answers). This range of opinions illustrates the fact that transfer pricing covers

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both taxation and management control aspects that are difficult to separate. For the purposes ofthe study, only one theme could be accepted, and the decision was made to include transferpricing in the taxation theme.

• Foreign currency management (foreign currency transactions and translation) is a major concernin international accounting. Three of our six experts put foreign currency management in general(topics 11, 12 and 15 of the list in appendix 3) into a different theme from accounting for foreignexchange transactions and translation (topics 13 and 14). Two put all these topics into the sametheme, while one included foreign exchange risk management (topic 15) in the "managerialaccounting" theme. For simplicity’s sake, and to avoid increasing the number of themes, we optedto put all foreign currency-related topics into a single theme.

The themes determined in this way are listed below:

Table 1: List of themes

1 General presentation (Introduction/Definition of international accounting, emerging issues)2 Classification of financial reporting practices (classifications and differences, environmental influences)3 Comparative accounting practices (by countries and by issues)4 Harmonization/International standards5 Financial reporting and disclosure6 International financial statement analysis7 Foreign currency management (exchange rate, foreign-currency transactions and translation, future

contracts, transaction exposure, accounting for inflation)8 Managerial accounting (management control, strategic planning, performance evaluation, capital

budgeting for multinationals, accounting information systems for multinational corporations)9 International taxation (systems, transfer pricing)

10 Auditing (internal, external)

4 - APPLICATION OF THE ANALYSIS TABLE TO THE SAMPLE

We determined the proportion of the publication occupied by each theme in relation to the spacedevoted to all themes as a whole, by calculating the number of pages allotted to it. This enabledus to obtain comparable data for all the publications. In drawing up the tables, the followingconventions were adopted:

• when several themes are covered in the same chapter, with references, illustrations, casestudies, etc., we allocated the appendices to the relevant themes, proportionally to the number ofpages on each theme in the chapter.

• some themes can be approached from two angles. For example, inflation can be consideredfrom a comparative point of view, covering practices in several countries: in this case, we

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included it in theme n° 3 (comparative accounting practices). If, on the other hand, it is treated asa question of accounting for price fluctuations, from a general, and often American standpoint,we have put it into theme n° 7 (foreign currency management).

The same applies to translation of accounts into foreign currencies. Either the approach iscomparative, and theme n° 3 applies, or translation is considered from an essentially Americanangle, in which case it is included in theme n° 7 (foreign currency management).

To reduce the bias inherent in application of this analysis system by one individual, the same tablewas used by three different persons: the academic leading the study, and two students on theHEC doctoral program. The results were combined, to take into account differences in eachperson’s assessment of the table and interpretation of the publications. The resulting final tables,with results for each work studied, are summarized in table 2 below.

Table 2: Comparison: relative importance of themes covered

Gen-eralpres-ent-ation

Classif-ication offinancialreportingpractices

Comp-arative

acc-ountingpract-ices

Harmon-ization/

Inter-nationalstand-ards

Finan-cial

report-ing and

dis-closure

Inter-nationalfinancial

state-ment

analysis

Foreigncurren-

cymanage-

ment

Man-ager-ial

acc-oun-ting

Inter-na-

tionaltax-ation

Audit-ing

Total

Alexander & Nobes 15% 7% 27% 12% 0% 23% 9% 0% 7% 0% 100%Alhashim & Arpan 7% 2% 25% 14% 3% 12% 14% 9% 4% 10% 100%Belkaoui 5% 11% 0% 8% 0% 14% 30% 16% 15% 0% 100%Blake & Amat 0% 17% 66% 4% 0% 3% 3% 0% 0% 6% 100%Campedelli 8% 0% 76% 16% 0% 0% 0% 0% 0% 0% 100%Choi & Mueller 3% 10% 13% 7% 11% 6% 25% 10% 8% 7% 100%Evans, Taylor 8% 0% 19% 6% 0% 0% 33% 10% 17% 7% 100%Iqbal, Melcher & Elmallah 4% 2% 23% 6% 7% 21% 10% 12% 6% 9% 100%Lawrence 2% 2% 80% 6% 0% 11% 0% 0% 0% 0% 100%Mueller, Gernon & Meek 7% 8% 12% 9% 21% 8% 5% 22% 8% 0% 100%Nobes & Parker 7% 9% 69% 5% 0% 5% 0% 0% 0% 5% 100%Obert 1% 0% 50% 6% 25% 0% 3% 0% 0% 15% 100%Quesada, Blanco & Gonzalez 4% 0% 55% 7% 34% 0% 0% 0% 0% 0% 100%Radebaugh & Gray 9% 7% 28% 7% 11% 4% 12% 10% 6% 7% 100%Zambon 20% 35% 0% 45% 0% 0% 0% 0% 0% 0% 100%

Average 7% 7% 36% 11% 7% 7% 10% 6% 5% 4% 100%Standard deviation 5% 9% 27% 10% 11% 8% 11% 7% 6% 5% 0%

5 - CLASSIFICATION

The prefaces, forewords and introductory chapters of the selected works contained pointers toseveral possible classifications of topics and themes. T. Evans, M. Taylor and O. Holzmann

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(1994, p. 2) believe that the most important topics in international accounting fall into twocategories:

Financial accounting topics: Translation, Consolidation, Segment reporting, Inflationaccounting, Disclosure, Auditing, Taxation, Comparative accounting (with non-US nations).

Managerial accounting topics: Foreign exchange risk management, Foreign investment analysis,Information systems, Transfer pricing, Budgeting, Performance evaluation, Control, Operationalauditing.

This categorization is somewhat debatable, as it gives the role of foreign currencies, for example,an impact in both areas, and has the same effect for other topics, such as consolidation or thetreatment of inflation.

These authors state6 that international accounting is a well-established specialty area withinaccounting and has two major dimensions: (1) Comparative: Examining how and why accountingprinciples differ from country to country; and (2) Pragmatic: accounting for the operationalproblems and issues encountered by individuals and firms in international business. Although, inour opinion, there is no common division in these two systems of classification, Evans, Taylorand Holzmann add that the comparative dimension of international accounting is oriented towardfinancial accounting, and the pragmatic one tends to be managerial.

L. Radebaugh and S. Gray (1993, p. 9) also write that the study of international accountinginvolves two major areas: descriptive/comparative accounting and the accounting dimensions ofinternational transactions/multinational enterprises. This second area principally covers theproblems encountered by multinational corporations: Financial reporting problems, translation offoreign currency financial statements, information systems, budgets and performance evaluation,audits, and taxes. On the basis of this classification, our themes are distributed as follows:

Table 3: Classification of themes: Radebaugh/Gray

Descriptive/comparative accounting Accounting dimensions of internationaltransactions/multinational enterprises

1 General presentation 7 Foreign currency management2 Classification of financial reporting practices 8 Managerial accounting3 Comparative accounting practices 9 International taxation4 Harmonization/International standards 10 Auditing5 Financial reporting and disclosure6 International financial statement analysis

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Using the classification proposed by T. Evans, M. Taylor and O. Holzmann (1994), the resultsare as below:

Table 4: Classification of themes: Evans/Taylor/Holzmann

Financial accounting Managerial accounting1 General presentation 7 Foreign currency management2 Classification of financial reporting practices 8 Managerial accounting3 Comparative accounting practices4 Harmonization/International standards5 Financial reporting and disclosure6 International financial statement analysis9 International taxation

10 Auditing

Another approach would be to group the themes under the headings of information production orinformation utilization.

Table 5: Classification of themes based on the concepts of informationproduction/utilization

Accounting information production Accounting information utilization1 General presentation 5 Financial reporting and disclosure2 Classification of financial reporting practices 6 International financial statement analysis3 Comparative accounting practices 8 Managerial accounting4 Harmonization/International standards7 Foreign currency management9 International taxation

10 Auditing

A fourth system of classification can also be proposed, based on the number of themes coveredout of the ten selected themes. First, the presence or absence of themes in a given publicationmust be noted (see table 6 below)7. The summarized results (see table 7, number of pages) arethen used to classify the sample textbooks according to the categories in the above tables.

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Table 6: Number of themes

Gen-eralpres-ent-ation

Classif-ication offinancialreportingpractices

Comp-arative

acc-ountingpract-ices

Harmon-ization/

Inter-nationalstand-ards

Finan-cial

report-ing and

dis-closure

Inter-nationalfinancial

state-ment

analysis

Foreigncurrencymanage-

ment

Man-agerial

acc-oun-ting

In-ter-

nationaltax-ation

Audit-ing

Total

Alexander & Nobes 1 1 1 1 0 1 1 0 1 0 7Alhashim & Arpan 1 1 1 1 1 1 1 1 1 1 10Belkaoui 1 1 0 1 0 1 1 1 1 0 7

Blake & Amat 0 1 1 1 0 1 1 0 0 1 6Campedelli 1 0 1 1 0 0 0 0 0 0 3Choi & Mueller 1 1 1 1 1 1 1 1 1 1 10Evans, Taylor 1 0 1 1 0 0 1 1 1 1 7Iqbal, Melcher & Elmallah 1 1 1 1 1 1 1 1 1 1 10Lawrence 1 1 1 1 0 1 0 0 0 0 5Mueller, Gernon & Meek 1 1 1 1 1 1 1 1 1 0 9Nobes & Parker 1 1 1 1 0 1 0 0 0 1 6Obert 1 0 1 1 1 0 1 0 0 1 6Quesada, Blanco & Gonzalez 1 0 1 1 1 0 0 0 0 0 4Radebaugh & Gray 1 1 1 1 1 1 1 1 1 1 10Zambon 1 1 0 1 0 0 0 0 0 0 3

Table 7: Classifications

Radebaugh/Gray Evans/Taylor/Holzmann Production/UtilizationDescriptive/comparativeaccounting

Accountingdimensions

ofinternationaltransactions

Total Finan-cial

account-ing

Manag-erial

account-ing

Total Accountinginformationproduction

Accoun-ting

inform-ation

utilization

Total

Alexander & Nobes 84% 16% 100% 91% 9% 100% 77% 23% 100%Alhashim & Arpan 63% 37% 100% 77% 23% 100% 76% 24% 100%Belkaoui 39% 61% 100% 54% 46% 100% 70% 30% 100%

Blake & Amat 91% 9% 100% 97% 3% 100% 97% 3% 100%Campedelli 100% 0% 100% 100% 0% 100% 100% 0% 100%Choi & Mueller 50% 50% 100% 65% 35% 100% 73% 27% 100%Evans, Taylor 33% 67% 100% 57% 43% 100% 90% 10% 100%Iqbal, Melcher & Elmallah 63% 37% 100% 78% 22% 100% 60% 40% 100%Lawrence 100% 0% 100% 100% 0% 100% 89% 11% 100%Mueller, Gernon & Meek 65% 35% 100% 73% 27% 100% 49% 51% 100%Nobes & Parker 95% 5% 100% 100% 0% 100% 95% 5% 100%Obert 81% 19% 100% 97% 3% 100% 75% 25% 100%Quesada, Blanco & Gonzalez 100% 0% 100% 100% 0% 100% 66% 34% 100%Radebaugh & Gray 65% 35% 100% 78% 22% 100% 76% 24% 100%Zambon 100% 0% 100% 100% 0% 100% 100% 0% 100%

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6 - ANALYSIS OF CONTENTS OF TEXTBOOKS USING THE TABLES

The sample textbooks on international accounting were classified on the basis of relevant criteria.A principal component analysis , using two tables of data (table 2, Relative importance of themescovered, and table 7, Classifications, plus the total themes as shown in table 6), brings out thefactors which predominate in each publication’s contents. This means that the properties of arelatively high number of variables (10 for table 2 and 7 for table 7) can be contained in two orthree factors. The results obtained for table 2, then table 7 are presented below. Two differentclassifications were developed in this way.

6.1 Table 2 - relative importance of themes covered

Three factors are used. They can analyze almost 75% of the global dispersion of individuals, inother words 75% of the spatial translation of individuals.

6.1.1 The factors

The meaning of a factor is determined through interpretation of the axes. This interpretation isfacilitated by the factorial coordinates of variables along the axis (see Diagram 1).

Diagram 1

RELATIVE IMPORTANCE OF THEMES

Position of themes in relation to factor 1 and 2

1.0.50.0

Foreign Currency management

Managerial Accounting International Taxation

International FinancialStatement Analysis

Auditing

Financial Reporting and Disclosure

Comparative Accounting Practices

General presentation

Classification of financial reporting practices

Harmonization / International standards

Factor 1

Factor 2

-.5-1.0

-1.0

-.5

0.0

1.0

.5

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Factor 1 (F1): View of internationalization

Factor 1 shows:

• positive correlation with the "international taxation" and "foreign currency management"variables, and to a lesser extent, with the "managerial accounting" variable;• negative correlation with the "comparative accounting practices" variable.

In terms of content, it marks the contrast between works on multinational accounting and workson comparative accounting practices. The former cover problems inherent to theinternationalization of accounting systems common to most countries, while the latter examinedifferences between national accounting systems.

Factor 2 (F2): The generalization (non specialization) factor

Factor 2 shows:

• positive correlation, principally with the "harmonization/international standards" variable, and toa lesser degree with the "general presentation", then the "classification of financial reportingpractices" variable;• negative correlation with the "auditing" variable.

These variables never exceed 15% of the total pages in a sample publication.

This factor reflects the fact that no particular subject dominates within the publication, and/or thatthe publication covers essentially general subjects: general presentation, classification of practicesand international standardization. It therefore separates the non-specialized works from theothers.

Factor 3 (F3)

Factor 3 shows:

• positive correlation with the "financial reporting and disclosure" variable;• negative correlation with the "international financial statement analysis" variable.

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In terms of content, it marks the contrast between foreign financial statement analysis andproblems relating to financial reporting and disclosure. The books studied cover the differencesbetween financial statements in one of two mutually exclusive ways:

• either from the angle of methods and volume of information disclosed;• or from the angle of financial statement analysis.

6.1.2 Classification of works studied

A joint analysis of diagrams 2 and 3 results in classification of the books in three groups.

Diagram 2

RELATIVE IMPORTANCE OF THEMES

Position of textbooks in reltion to Factor 3 and 1

REGR factor score 2 for analysis 1

43210-1-2

REGR.

,

-..5

-1.0

-1.5

Zamb o n

Rad eb aug h

Ques ada

Ob ert

No b es

Mueller

Lawrence

Iqb al

Evans

Cho i

Campedelli

B lake

Belkao ui

A lhashim A lexander

factorscore 1foranalysis 1

0.0

.5

1.0

1.5

2.0

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Diagram 3

RELATIVE IMPORTANCE OF THEMES

Position of textbooks in relation to factor 3 and 1

REGR factor score 3 for analysis 1

2 .01.51.0.50.0-.5-1.0-1.5-2 .0

2 .0

1.5

1.0

.5

0 .0

-.5

-1.0

-1.5

Zamb o n

Radeb augh

Ques ada

Ob ertNo b es

M ueller

Lawrence

Iqb al

Evans

Cho i

Campedelli

B lake

Belkao ui

A lhashimA lexander

analysis 1

factorscore 1 for

REG.

Table 8: Classification of works studied with reference to relative importance of themescovered8

Group 1 Group 2 Group 3Belkaoui Blake Alexander

Choi Campedelli AlhashimEvans Lawrence Iqbal

Mueller Nobes RadebaughQuesada Zambon

Obert

Group 1: works on international accounting

The works of Belkaoui, Choi, Evans & Mueller treat accounting from a transnational point ofview. Their factor 2 coordinates are well into the positive (diagram 2). Comparative accounting,in their books, has a relatively less important position than in the other works studied: less than20% of pages. International managerial accounting issues occupy a prominent position, rangingfrom 35% for Mueller to more than 60% for Belkaoui and Evans.

Auditing is approached either only marginally as by Choi and Evans (7% of pages), or not at allby the others. General themes represent a relatively significant portion of the total, from 14% forEvans to 24% for Belkaoui and Mueller.

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Similarly, Mueller devotes 21% of his pages to disclosure, and Belkaoui allocates 14% tocomparative financial analysis.

Group 2: works on comparative accounting

This group comprises books where the majority, that is more than 50% of discussion, concernscomparison of national accounting practices in different countries, and there is no independentreference to transnational accounting. Four books devote more than two thirds of their pages tocomparisons of accounting practices in different countries, and never more than 20% to anothertheme: they are the works of Blake (66%), Campedelli (76%), Lawrence (80%) and Nobes(69%).

The works of Obert and Quesada cover not only comparative practices, which occupy 50% and55% respectively of their pages, but also the themes of financial reporting and disclosure, whichoccupy 25% for Obert and 34 % for Quesada.

General themes are not neglected. They represent more than 20% of the works of Blake,Campedelli and Nobes.

Group 3: general works

The other books take a "mixed" approach: neither "international multinational" accounting, norcomparisons between the practices in different countries, have a dominant position, except in theworks of Alhashim and Radebaugh, which allocate a non-negligible place to comparativeaccounting practices, with 25% and 28% of pages respectively. The books by Alexander andIqbal devote more than 20% of their pages to international financial statement analysis.Nevertheless, these four works are classified as "general” because no subject other than thosementioned above exceeds 15% of the total. Zambon’s book also belongs to this group, since 90%of its pages cover matters of a general nature.

The classification based on themes thus reveals two "typical patterns" in the selected internationalaccounting works. However, there are five "mixed" works, and as a result, in a second stage, thethemes are grouped a priori so as to accentuate the trends.

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6.2 Table 7 - relative importance of approaches

6.2.1 The factors

Two factors explain almost 95% of the distribution. The most discriminant factor accounts for75% of the distribution.

Diagram 4

RELATIVE IMPORTANCE OF APPROACHES

Position of approaches in relation to factor A and B

Factor

1.0.50.0-.5-1.0

1 .0

.5

0 .0

-.5

-1.0

Financial accounting

Descriptive/comparative approach

Managerial accounting

Accounting dimensionof multinational enterprises

Accounting information production

Accounting information utilization

A

Number

Factor B

Factor A: "global" or "local" approach

Factor A shows:

• positive correlation with the following variables: number, multinational dimension ofenterprises, managerial accounting;• negative correlation with the following variables: descriptive-comparative approach, financialaccounting.

The "financial accounting" and "descriptive-comparative approach" variables, and the"multinational dimension of enterprises" and "managerial accounting" variables have, respectively,

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the same coordinates in relation to the two factors. Their similarity reflects the existence of twogroups of publications: works on "international multinational" accounting and works oncomparative financial accounting.

Factor B: whether the approach is strongly focused on information production

Factor B shows:• positive correlation with the “accounting information utilization” variable;• negative correlation with the “accounting information production” variable.

The relative share of contents allocated to production of accounting information is much largerthan the space allotted to the utilization of this information. More than half the works studieddevote at least three quarters of their discussions to accounting information production, and nobook, except that by Mueller, allocates less than 66% to this area. The result is logical, since thesample essentially comprises works which mainly concern financial accounting. Consequently,factor B allows us to discriminate, among the works oriented towards production of accountinginformation, between those which devote a non-negligible section to the utilization of financialstatement, and those which do not.

6.2.2 The textbooks.

Two families can now be identified.

Table 9: Classification of works by approach

Family A Family BSubfamily 1 Subfamily 2 Subfamily 1 Subfamily 2

Belkaoui Alhashim Blake AlexanderChoi Iqbal Campedelli ObertEvans Mueller Lawrence

Radebaugh NobesQuesadaZambon

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Diagram 5

RELATIVE IMPORTANCE OF APPROCHES

Position of textbooks in relation to factor A and B

REGR factor score 1 for analy sis 1

1.51.0.5 0.0-.5-1.0-1.5

2

1

0

-1

-2

-3

Factor A

Factor B

Radebaugh

Alhashim Choi

Belkaoui

Evans

Blake

Alexander

Obert

Quesada

Lawrence

Nobes

Iqbal

Mueller

Zambon (a)

(a) Campedelli and Zambon have identical coordinates

REG.

factor score 2

for analysis 1

Family A: works on international managerial accounting

This first family of works consists of those which devote more than 20% of their pages tomanagerial accounting and cover more than 7 themes. They are divided into two "subfamilies",according to the relative portion allocated to managerial accounting. The first of these subfamiliescomprises works containing a large proportion of managerial accounting discussion. They are thebooks by Belkaoui (46%), Evans (43%) and Choi (35%). The second subfamily consists of worksallocating between a quarter and a third of their contents to managerial accounting: Alhashim,Iqbal, Mueller and Radebaugh.

Family B: the "comparative" works

Family B comprises works which essentially cover financial accounting and accountinginformation production.

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A secondary criterion is applied to separate the purely "comparative" works from the others. Inthe former, more than 90% of the contents relate to international comparisons. The books byAlexander and Obert, which are introductory textbooks, stand alone.

7 - DEFINITION OF INTERNATIONAL ACCOUNTING BY THE AUTHORS

The different approaches already described are evidence that a certain variety of viewpointsexists. We wanted to compare our analyses with the definitions of international accounting givenby the authors themselves. Having studied their prefaces, forewords, introductions and/or initialchapters, we noted that only rarely did an author state a precise definition of internationalaccounting. The table below summarizes our findings:

Table 10: Inclusion or otherwise of a definition of international accounting

Title (authors) Definition includedA European Introduction to Financial Accounting (Alexander & Nobes) NoInternational Dimensions of Accounting (Alhashim & Arpan) NoInternational & Multinational Accounting (Belkaoui) YesEuropean Accounting (Blake & Amat) NoRagioneria Internazionale (Campedelli) YesInternational Accounting (Choi & Mueller) YesInternational Accounting & Reporting (Evans, Taylor & Holzmann) YesInternational Accounting - A Global Perspective (Iqbal, Melcher & Elmallah) YesInternational Accounting (Lawrence) YesAccounting - An International Perspective (Mueller, Gernon & Meer) NoComparative International Accounting (Nobes & Parker) NoPratique internationale de la comptabilité et de l'audit (Obert) NoInternational Accounting & Multinational Enterprises (Radebaugh & Gray) YesNormativa contable internacional (Quesada, Blanco & Gonzalez) NoProfili di ragioneria internazionale e comparata (Zambon) Yes

7.1 Works without a definition of international accounting

There are several possible explanations for the non-inclusion of a definition. The most probablereason is that for the authors, international accounting as such does not exist, but is in factfinancial or managerial accounting with international aspects caused by the internationalization ofthe economy.

Seen in this light, the book titles become highly significant:

• D. Alhashim and J. Arpan (1992) title their book "International Dimensions of Accounting",clearly not "international accounting".

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• Similarly, G. Mueller, H. Gernon & G. Meek (1994) take as their title: "Accounting - AnInternational Perspective", showing that once again the basic subject is accounting, rather thaninternational accounting.

• R. Obert’s title is "International practices in accounting and auditing" ("Pratique internationalede la comptabilité et de l'audit"): the subject is accounting, treated from an international angle.

• Finally, the title of the book by D. Alexander and C. Nobes (1994) - "A European Introductionto Financial Accounting" - clearly indicates that it covers financial accounting from a Europeanangle.

7.2 Works including a definition

These authors can be considered as either implicitly or explicitly believing that internationalaccounting is a subject in its own right.

Three publications9 begin by referring to three approaches to international accounting defined byT. R. Weirich, C. G. Avery and H. R. Anderson10: (1) a universal system, (2) a comparativesystem, and (3) accounting for subsidiaries.

In addition, several authors give their own definitions, which are worth quoting here. Accordingto F. Choi and G. Mueller (1992, p. 12), international accounting extends general-purpose,nationally oriented accounting in its broadest sense to: (1) international comparative analysis, (2)accounting measurement and reporting issues unique to multinational enterprises, (3) accountingneeds of international financial markets, and (4) harmonization of worldwide accounting andfinancial reporting diversity via political, organizational, professional, and standard-settingactivities.

For A. Belkaoui (1994, p. 12), these new environmental factors of (1) the global economy, (2)the international monetary system, (3) the multinational corporation, and (4) foreign directinvestment, have created an environment in which business transactions, their conduct,measurement and disclosure, take new and distinctive forms that call for a specific accountingsubdiscipline. That accounting subdiscipline is international accounting.

The definition of international accounting, like its field of application, undergoes frequent changesin order to adapt to changing contexts, needs and expectations. International accounting takes inall the technical accounting problems in financial, managerial, tax and auditing areas that have abearing on the conduct, measurement and disclosure of foreign operations. There are issues

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relevant to international business which create special accounting problems and specific solutionsthat differ from the solutions adopted in a domestic context.

In the words of T. Evans, M. Taylor and O. Holzmann, international accounting, which includesboth financial and managerial accounting, is defined as accounting for international transactions,the operations of international firms, and comparisons of accounting principles and practicesfound in foreign lands and the procedures by which they are established.

According to M. Iqbal, T. Melcher and A. Elmallah (1997, p. 2), international accounting isdefined as accounting for international transactions, comparisons of accounting principles indifferent countries, and harmonization of diverse accounting standards worldwide. This definitionencompasses the operational needs of the accountant in financial, managerial, tax, auditing, andother areas of accounting.

For S. Lawrence (1996, p. 1), a short definition could concentrate on the two words"international" and "accounting". The former can be defined as "concerning or involving two ormore nations or nationalities" and the latter "the process of recording, analyzing and reportingfinancial information so as to maximize the value of the information produced". Thus internationalaccounting is simply the "process of providing useful financial information viewed on amultinational basis".

As we see from this comparison, each of these definitions is closely linked to the contents of itsauthor’s book. That may appear obvious, but it does mean they cannot supply a sufficiently clearview of the relative importance enjoyed by each approach to international accounting. It istherefore necessary to refer to the tables and categories described earlier.

CONCLUSION

Among other observations, our statistical analysis revealed the dual nature of textbookapproaches to international accounting. There is one group of textbooks covering the accountingaspects of company internationalization, with a "monistic" view of accounting systems, in otherwords one which considers financial accounting and management accounting together; thesebooks are concerned with the accounting dimensions, in the broadest sense, of multinationalcorporations. Then there is a second group of textbooks which take a country-by-countryapproach, and seek to highlight the differences between countries. Problems relating to theinternationalization of accounting frameworks are dealt with locally, on a national level. It is truethat a few books have a "mixed" approach, but they remain clearly affiliated to one of these twogroups.

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Can the existence of a link between a book’s membership of family A or family B (in table 9) andthe author’s institution of education be pure coincidence? One thing is clear: the first group ofbooks (family A) are written by authors teaching in the USA, while the second group (family B)are written by European-based authors11.

APPENDIX 1 - LIST OF TEXTBOOKS SELECTED

ALEXANDER David and NOBES Christopher: A European Introduction to Financial Accounting. Prentice Hall(UK), 1994, 460 pages.

ALHASHIM Dhia D. and ARPAN Jeffrey S.: International Dimensions of Accounting. PWS Kent (USA), 2ndedition, 1992, 252 pages.

BELKAOUI Ahmed: International & Multinational Accounting. The Dryden Press (UK), 1994, 502 pages.

BLAKE John and AMAT Oriol: European Accounting. Pitman (UK), 1993, 237 pages.

CAMPEDELLI Bettina: Ragioneria Internazionale. G. Giappichelli Editore (Italy), 1994, 366 pages.

CHOI Frederick D.S. and MUELLER Gerhard G.: International Accounting. Prentice Hall (USA), 2nd edition,1992, 610 pages.

EVANS Thomas G., TAYLOR Martin E. and HOLZMANN Oscar: International Accounting and Reporting.South-Western Publishing (USA), 2nd edition, 1994, 536 pages.

IQBAL Zafar, MELCHER Trini & ELMALLAH Amin E. : International Accounting - A Global Perspective.South-Western, 1996, 450 pages.

LAWRENCE Steve: International Accounting. International Thomson Business Press, 1996, 411 pages.

MUELLER Gerhard G., GERNON Helen and MEEK Gary K.: Accounting - An International Perspective. Irwin(USA), 3rd edition, 1994, 200 pages.

NOBES Christopher and PARKER Robert (coordinated by): Comparative International Accounting. Prentice Hall(UK), 4th edition, 1995, 494 pages.

OBERT Robert: Pratique internationale de la comptabilité et de l'audit. Dunod (France), 1994, 307 pages.

QUESADA SANCHEZ Francisco Javier, BLANCO GOMEZ Antonio and GONZALEZ GIMENEZ Raimundo:Normativa contable internacional. Ediciones Ciencias Sociales (Spain), 1991, 435 pages.

RADEBAUGH Lee H. and GRAY Sidney J.: International Accounting and Multinational Enterprises. John Wiley& Sons (USA), 3rd edition, 1993, 582 pages.

ZAMBON Stefano: Profili di ragioneria internazionale e comparata. Cedam (Italy), 1996, 267 pages.

APPENDIX 2 - LIST OF PUBLICATIONS NOT INCLUDED IN SAMPLE

1 - Textbooks

FOX Samuel and RUESCHOFF Norlin G. : Principles of International Accounting. Austin Press (USA), 1986.

HOLZER H. Peter (coordinated by) : International Accounting. Harper & Row (USA), 1984, 524 pages.

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2 - Reference works

ALEXANDER David and ARCHER Simon (coordinated by) : The European Accounting Guide. The AcademicPress (UK), 2nd edition, 1995, 1570 pages.

Coopers & Lybrand : International Accounting Summaries. John Wiley (USA), 2nd edition, 1993 , 1000 pagesapprox.

KLEE Louis (directed by) : La comptabilité des sociétés dans la C.E.E. La Villeguerin éditions, 1992, 664 pages.

LEQUIN Yves : Principes comptables européens. Sedifor (Éditions d'Organisation), 1994, 189 pages.

Nexia International : The International Handbook of Financial Reporting. Chapman & Hall, 1993, 411 pages.

MAZARS SA (directed by) : Comptabilité dans les principaux États de la CEE. Delmas, 1993, 383 pages.

3 - Research and anthologies

BELKAOUI Ahmed : International Accounting: Issues & Solutions. Quorum Books (USA), 1985, 364 pages.

BELKAOUI Ahmed : Judgment in International Accounting. Quorum Books (USA), 1990, 130 pages.

BLAKE John and HOSSAIN Mahmud : Readings in International Accounting. International Thomson BusinessPress (UK), 1996, 397 pages.

CHOI Frederick D.S. and MUELLER Gerhard G. : Frontiers of International Accounting: An Anthology. UmiResearch Press (USA), 1985, 313 pages.

GRAY Sidney J. (directed by) : International Accounting and Transnational Decisions. Butterworth (UK), 1983,500 pages.

GRAY Sidney J., COENENBERG Adolf O. and GORDON Paul D. : International Group Accounting. Routledge,2nd edition, 1993, 435 pages.

SAMUELS John M. and PIPER A.G. : International Accounting: A survey. Croom Helm (UK), 1985, 197 pages.

4 - Case studies

SCHWEIKART James A., GRAY Sidney J. and ROBERTS Clare B. (coordinated by) : International Accounting -A Case Approach. McGraw-Hill (USA), 1st edition, 1994, 587 pages.

APPENDIX 3 - LIST OF TOPICS

Conover, Salter, and Price(International Accounting Education: A Comparison of Course Syllabi ad CFO Preferences

Issues in Accounting Education Vol. 9, No. 2, Fall 1994)

1 Introduction and definition of international accounting2 Classification of financial reporting practices (systems)3 Description/comparison of financial reporting practice by countries (down to specific level)4 Description/comparison of financial reporting practice by issue (LIFO, pension, etc.)5 Description/comparison of financial reporting practice by measurement/disclosure continuum6 Description/comparison of financial reporting practice by analyzing foreign financial statements7 Comparison/description of countries by institutional framework8 The measurement disclosure debate9 Harmonization and financial markets10 The institutional framework of harmonization/IASC standards11 Foreign exchange-markets

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12 Foreign exchange-basics, products, terminology, and mechanics13 Accounting for foreign exchange transactions14 Accounting for foreign exchange translation (SFAS No. 52)15 Foreign exchange risk management16 Capital budgeting in multinational enterprises17 International auditing (internal)18 International auditing (external)19 International auditing (the international auditing firm)20 The foreign Corrupt Practices Act21 Systems of taxation outside the U.S.A.22 Taxation-U.S. taxation of foreign income23 Taxation-transfer pricing24 Management accounting issues25 Accounting information systems issues (MIS)26 Accounting for inflation (cross-national comparisons)27 Capital markets effects of international accounting diversity)28 Environmental influences on accounting systems and practices29 Segmental reporting30 History of international accounting31 Ethics in international accounting32 Accounting for social and environmental issues33 The role of accounting in economic development34 Other (specify)

1 Foreword to Comparative International Accounting. C. Nobes and R. Parker, Prentice-Hall, 3rd edition, 1991, p.XIII.2 Op. Cit., preface p. XIII.3 This could have been the subject for separate research.4 This is not a value judgement; these works are extremely precious resources.5 This list is taken from the article by T. Conover, S. Salter and J. Price : "International Accounting Education: AComparison of Course Syllabi and CFO Preferences" (Issues in Accounting Education Vol. 9, No. 2, Fall 1994).6 Op. Cit., p. 3.7 This table has a 0% significance level, i.e. it assumes that a theme is absent if it is not considered at all. Anotherapproach could have been to treat a theme as absent if the number of pages allocated to it were equal to or lessthan a certain percentage, for example 3%, of the total book.8 Only the first author’s name is quoted.9 F. Choi, A. Belkaoui and J. Samuels (not included in the sample).10 Weirich, Thomas R., Avery Clarence G. and Anderson, Henry R. (1971): International Accounting: VaryingDefinitions. International Journal of Accounting, autumn, pp. 80-81.11 The only exception is the textbook by L. Radebaugh and S. Gray : it should be pointed out that S. Gray teachesin the UK. Furthermore, the first two editions of this book were published by a different pair of authors, L.Radebaugh and J. Arpan, both working in the USA. Although S. Gray has no doubt left his mark on the thirdedition, our statistical analysis shows that this book, which belongs to family A, is influenced by Americanteaching practices.