Nobes Classification of the Accounting System

Nobes Classification of the Accounting System

Nobes Classification of the Accounting System

Nobes identified two reasons for the difference in accounting systems. They are Anglo-American model and the Anglo-European model. The Anglo-American model is an accounting system that has a strong influence by professional accounting bodies rather than government. It emphasizes the importance of capital markets. The Anglo-European model of accounting has a small input from accounting professionals. Little reliance on qualitative requirements and has a stronger reliance on government. This accounting method is heavily associated with tax rules in place (Nobes, 1998, pp. 162-187).

The author is saying that the two different systems we have in place depends on who is the strong influence on the accounting system. In the Anglo-American system it is professional accounting bodies and where a capital market is important. Then when it comes to the Anglo-European system it is the government and tax rules that are important (Nobes, 1998, pp. 162-187).

Almost all the countries have stepped in to the businesses which are more of cross border in nature in the recent times and financial reporting along with accounting considerations in this regard should be, such a way that, it is understood and presented uniformly for entire business. So the financial reporting should be modulated in such a way that, it becomes easy for understanding for everyone irrespective of country. As it is observed that, there are cross border investments viewing the business opportunities across the globe and an investor from a developed economy would prefer to invest in a developing economy for better returns , as an event of this, there have to be simple accounting presentation by the companies. Going forward in the ten years, the field of accounting would be in a consolidated format and as the business dynamism is increasing day on day, every country would be advised to go for financial...