PURPOSES AND CONTENTS OF ANNUAL FINANCIAL STATEMENTS AS SEEN BY VARIOUS NATIONALITIES

Differing views on the objectives and contents of financial statements have for many decades created problems for the business and accounting com munities of the world. In recent years such differences have tended to compound, and at the same time have assumed greater significance with the continual increase in international trade and the development of transna tional capital markets. This article is concerned not only with identifying the nature of the differences that exist but, more importantly, with exploring the origins of the differences. An appreciation of the origins of the differences is an essential prelude in developing a solution to the present diversity in practice. Surprisingly little has been written on the objectives of financial state ments as envisaged by various nationalities, and the law and professional pronouncements of most countries have at best given cursory attention to the objectives underlying financial reporting. The need for clearly defined objectives has been perceived in a few countries but is not yet recognized in many others. Accordingly, it is generally necessary to review many aspects of financial reporting in order to identify the objectives that underlie financial statements in a particular country.