International Aspects of Accountancy and Finance

  • R. J. Briston


There are many reasons, both practical and theoretical, which might motivate a decision to commence operations in an overseas country. Practical factors might include the creation of import controls or tariff barriers, the level of transport costs, government concessions, nationalistic pressure, all of which would encourage a company to set up production facilities in an overseas market instead of manufacturing in its home country and exporting. The main theoretical argument lies in the field of portfolio theory for it can be shown that geographical diversification of a portfolio is beneficial from the point of view of risk reduction in the same way as industry diversification. Consequently industrial concerns can reduce the volatility of their returns by both geographical and industrial diversification. This section considers the factors which should be taken into account in the appraisal of such operations, the selection of the appropriate method of financing and the problems of control. Finally, some of the problems involved in the spread of multinational companies in recent years are considered.


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Notes and References

  1. 1.
    David K. Eiteman and Arthur I. Stonehill, Multinational Business Finance 2nd Ed. (Addison-Wesley Publishing Co., 1979).Google Scholar
  2. 2.
    Michael Z. Brooke and H. Lee Remmers, The Strategy of Multinational Enterprise (London: Longman, 1970) p. 157.Google Scholar
  3. 3.
    J. M. Samuels, R. E. V. Groves and C. S. Goddard, Company Finance in Europe (Institute of Chartered Accountants in England and Wales, 1975) p. 239.Google Scholar
  4. 4.
    Accounting Research Bulletin no. 43 (American Institute of Certified Public Accountants, 1961) ch. 12, para. 15.Google Scholar
  5. 5.
    Ibid., para 18.Google Scholar
  6. 6.
    Samuel, R. Hepworth, Reporting Foreign Operations, Michigan Business Studies vol. XII no. 5 (Ann Arbor: University of Michigan Press, 1956).Google Scholar
  7. 7.
    Accounting Treatment of Major Changes in the Sterling Parity of Overseas Currencies para. 18a.Google Scholar
  8. 8.
    Ibid., para. 18c.Google Scholar
  9. 9.
    Gerhard G. Mueller, International Accounting (New York: Macmillan Co., 1967) pp. 207–12.Google Scholar
  10. 10.
    P. Rosenfield, ‘General Price-Level Accounting and Overseas Operations’, Journal of Accountancy (February 1971) and P. Rosenfield, ‘The Golden Opportunity’, Accountancy (February 1975).Google Scholar
  11. 11.
    Author’s note. This was clearly written in the light of modern UK practice and ignores the acceptance by US companies of the monetary/non-monetary method.Google Scholar
  12. 12.
    HMSO, Cmnd 7654, September 1979.Google Scholar
  13. 13.
    A. J. H. Enthoven, Accountancy and Economic Development Policy (Amsterdam: North-Holland Publishing Co., 1973) 112–13.Google Scholar
  14. 14.
    Michael Z. Brooke and H. Lee Remmers, Strategy of Multinational Enterprise 2nd. ed. (London, Pitman, 1978).Google Scholar
  15. 15.
    Frederick D. S. Choi and Gerhard G. Mueller, An Introduction to Multinational Accounting (Englewood Cliffs, N.J.: Prectice-Hall, 1978).Google Scholar
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    David K. Eiteman and Arthur I. Stonehill, Multinational Business Finance 2nd. ed. (Reading, Mass.: Addison-Wesley, 1979).Google Scholar
  17. 17.
    A. J. H. Enthoven, Accountancy and Economic Development Policy (Amsterdam: North-Holland, 1973).Google Scholar
  18. 18.
    Elwood L. Miller, Accounting Problems of Multinational Enterprises (Lexington, Mass: Lexington Books, 1979).Google Scholar
  19. 19.
    Gerhard G. Mueller, International Accounting (London: Macmillan Co., 1967).Google Scholar
  20. 20.
    K. Michael Oldham, Accounting Systems and Practices in Europe (Gower Press, 1975).Google Scholar
  21. 21.
    Sidney M. Robbins and Robert M. Stobaugh, Money in the Multinational Enterprise (London: Longman, 1974).Google Scholar

Copyright information

© R. J. Briston, J. R. Davies, P. N. Dean, C. Edwards, S. Ewing, C. S. Greensted, D. Lyall, the estate of C. McGeehan, W. McInnes, A. J. Millar, E. P. Minnis, L. Oakes, R. Perks, C. R. Tomkins 1981

Authors and Affiliations

  • R. J. Briston
    • 1
    • 2
  1. 1.University of StrathclydeUK
  2. 2.University of East AngliaUK

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