The
reason for the existence of different accounting standards around the world is the existence of
different socioeconomic conditions, different cultures, and differing ways in which people
choose to manage their money.
For example, accounting standards in South
Africa have to allow for the existence of stokvels, which are clubs that
people belong to and contribute money to every month. In exchange, they receive payouts from
these clubs in certain circumstances, commonly when a loved one passes away and it is time to
pay burial expenses.
Another example would be the fact that countries who are
ruled by Sharia law will naturally have very different ideas about accounting standards than a
country like the US will.
The reason why a single set of accounting standards
cannot be applied globally is the existence of different cultural backgrounds and economic
systems.
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