International Accounting ( Part 8 )

INTERNATIONAL FINANCIAL ANALYSIS

A. Analysis of International Business Strategy

Analysis of business strategy is an important first step in the analysis of financial statements. This analysis provides a qualitative understanding of the company and its competitors related to the economic environment. By identifying the drivers of profit and risk factor is the main business, business strategy or business analysis will help the analyst to make a realistic prediction.

§ Difficulties in International Business Strategy Analysis
a. Availability of information.

Analysis of business strategy particularly difficult in some countries due to lack andalnya information about macroeconomic developments. Obtain information about the industry is also very difficult in many countries and the number and quality of information companies are very different. Availability of specific information about the company is very low in developing countries. Lately, many large companies that keep records and raise capital in foreign markets and have expanded their disclosure voluntarily switch to accounting principles that are recognized globally as an international financial reporting standards.
b. Recommendations for analysis.

Data limitations make the effort to analyze the business strategy by using traditional research methods to be difficult. Often frequent trips to study the local business climate and real bagaimanan industry and company operations, particularly in emerging market countries.

§ Basic Strategy

The basic strategy adopted in order to improve data and information services include:
1) One of the doors of data;

One of data meant that the Department of Agriculture just published a range of numbers for variables, indicators and time. A door that is data and agricultural information has been agreed by the echelon I units concerned before published outside through the Center for Agricultural Data and Information. Policy of the data and carried out by one door while the concept of centralizing the collection, processing, and presentation of data implemented in a distributed system by implementing an integrated information network.
2) Centralized concept;

In order to avoid duplication and do not statistical development activities and information systems, by dividing out all activities required in accordance with the functional tasks of each unit of data and statistics in the Department of Agriculture. By applying this strategy, expected to be achieved effectiveness and efficiency of use of available resources.
3) Internal consolidation by building infrastructure that support the execution of work, building a culture of work and service to all levels in the organization;
4) On the external side to coordinate with partners to establish cooperation in agriculture and information systems with the goal of mutual support, and complete support.

B. Measures Analysis of Accounting

The purpose of accounting analysis is to analyze the extent to which the company reported results reflect the economic reality. Analysts need to evaluate policy and accounting estimates, and analyze the nature and flexibility accounting of a company. The managers of the company is allowed to make a lot of consideration srelated to the accounting, because they know more about the financial condition and operations of their companies. Reported earnings is often used as a basis for evaluating the performance of their management.

Step in doing evaluation accounting quality of a company:
a) Identify the main accounting policies.
b) Analyze the accounting flexibility.
c) Evaluate the accounting strategy.
d) Evaluate the quality of disclosure.
e) Indentification potential problems.
f) Make adjustments for accounting distortions.

C. Effect Of Accounting Accounting Analysis of Inter-State and Difficulty in Obtaining Required Information

Analysts need to evaluate policies and accounting estimates, and analyze the nature and scope of a company's accounting flexibility. Effect on the measurement of quality of accounting, and auditing are very dramatic.

In obtaining the data of International Accounting, there are several difficulties, among others:
a) Adjustment of depreciation
Depreciation will affect profits, it is necessary to consider the age of the functions that must be decided asset management.
b) LIFO to FIFO inventory adjustment
Inventories should be converted into the FIFO method.
c) Reserves
Reserves are the company's ability to pay or cover expenses for removing cost. Financial Statement Adjustments reformulation of some of the changes after a few calculations on the points mentioned above.

D. Mechanisms to Overcome Differences Between State Accounting Principles

Several approaches can be done as follows:
a. Some analysts present the foreign accounting resize according to a group of internationally recognized principles or according to other, more general basis.
b. Some others develop a complete understanding of accounting practices in a particular group of countries and limited their analysis to firms located in these countries.

E. Difficulties and weaknesses in the International Financial Statement Analysis

1. Information access Information on thousands of companies from around the world have been widely available in recent years. Sources of information in countless numbers up through the World Wide Web (WWW). Companies in the world today have a website and annual report are available for free of charge from various other sources.
2. Timeliness of information timeliness of financial reports, annual reports, reports to regulators vary in each country.
3. Barriers of language and terminology.
4. Foreign currency issues.
5. Differences in the type and format of financial statements.

F. Use of the Website or the WWW (World Wide Web)

To Obtain Information Research Company Many companies do not make optimum use of disclosure of corporate information via the website, both for financial and corporate ustain ability. Another finding in this study is that many companies can not provide information for investors, most of the information presented in the company's website is about the products or services produced and the many companies that do not update the information presented.

Resources :

www.wikipedia.com
http://wartawarga.gunadarma.ac.id/2011/05/harmonisasi-akuntansi-internasional-2/~~V
www.fileden.com / ... / Ikhtisar% 20kuliah% 20akuntansi% 20internasional.ppt