Harmonization of international income tax accounting in four capitalist countries
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The purpose of this thesis is to explain the need for international accounting standards, the IASC's role in developing these standards, and a plan to be used by the IASC to harmonize income tax accounting standards in the U.S., the U.K, Germany, and Japan. Most research was taken from secondary sources, with the exception of one speaker from the Financial Accounting Standards Board. Harmonization of accounting standards is needed to gain easier access into capital markets, and for comparability of financial statements worldwide. The IASC currently issues international accounting standards, however, they are not mandatory, and too broad to be useful. Income tax accounting is a very important and influential part of the financial reporting process in each of these countries, especially in Germany and Japan where much of the current accounting practices are based on tax law. Harmonization of these practices will be, therefore, much more difficult. To further harmonize accounting standards, it will be necessary for the IASC to gain more authority to enforce their standards, and to narrow the requirements within the standards. Each of the countries must also be willing to concede some of their practices for the greater good. To harmonize income tax accounting standards in the long run, the U.S., with the issuance of Statement of Financial Accounting Standards No. 109, may be able to take a leadership role. The U.S. has more experience and technical expertise in working with this issue, and may be able to give support to the IASC in developing a useful harmonizing standard.