Accounting Sources


It is undeniable that the global market has been rapidly shifting over the last many years. Companies are increasingly motivated to enter the global business environment as a result of remarkable advancements in innovation, capital ejection, the desire to create new revenue streams, and the removal of inter-country exchange barriers. For venture development to occur, there is a desire for fiscal summary equivalence and, more specifically, for consistency in the presentation of budget reports. Harmonization is a method of increasing the similarity of bookkeeping practices by limiting their amount of variation.

Accounting Sources

What are Accounting Sources?

A proper accounting source archive verifies a monetary exchange. They are the source of the data preserved in the accounting records, and they are used to verify the authenticity of the transactions.

Bookkeeping source archives, for example, are required to show the following exchanges −

  • An assembling company purchased and paid for natural ingredients.

  • A company delivered things to a customer.

  • A web-based company sold an item over the internet.

  • A customer purchased an assistance subscription.

Factors Affecting the Accounting Sources

Overall Legal System

There are two types of overall legal systems: code regulation and precedent-based regulation. There are "some nations that have a "legalistic" bent toward accounting and those that do not." Customary regulation is used by nations having a non-legalistic approach to accounting. The primary reason for accounting rules in customary law regions is to protect the proprietors of the firms. The emphasis is on value suppliers (investors) rather than loan officers or tax collection specialists, making an estimation.

System of Tax Collection

In certain countries, tax assessment regulations and monetary disclosure criteria are tightly linked, whilst in others, they are wholly separate. For example, under customary law, nations' responsibility and account norms are maintained distinct. Code regulation countries, on the other hand, would often have a standard evaluation and monetary detailing standards. Assessment frameworks are classified into three types.

The main framework refers to these countries where "the evaluation norms and the monetary disclosing requirements are kept totally, or to a large measure, apart from one another." In the second type of expenditure framework, "there is a common framework, with many of the monetary disclosing criteria also being used by the duty experts." Charge specialists did not provide itemised rules for computation in this framework.

Provider of Finance

Finance Provider Banks, governments, and investors are the three main sources of money. The commitment of each of these sources to the construction of the company's monetary capital varies by nation. Banks, for example, acquire monetary cash flow from companies in countries such as Germany and France, whilst investors provide capital in countries such as England and the United States. The public authority is the supplier of capital in countries such as France and Sweden. This division of three types of capital sources indicates that bookkeeping practices differ to meet the needs of monetary providers.

In reality, the need for reliable data is less clear in countries where banks and the government are the key sources of monetary resources. This makes sense since data will be transmitted more easily in these countries because of the quick approach to dealing with the practical components of organisations that banks and governments have.


Another factor that influences bookkeeping practice norms is culture. Nations having a connection to a certain culture accept the accounting system developed in comparable cultures. During the period spent implementing new bookkeeping principles, commonality and language have an outstanding commitment.

In terms of IAS/IFRS acceptance, they have shown that both commonality and language tend to favor nations in the Anglo-American group. This is due, first and foremost, to the major Anglo-American influence in the growth of IAS/IFRS, and secondly, since English is the language used to communicate inside the IASB. As a result of their shared language and social environment, the problems that Anglo-American countries will face as a result of the adoption of IAS/IFRS will be reduced.


The practical expansion into new corporate sectors shifted the strategy of a typical global accounting system. They are aiming to separate and introduce the aspects that influence the acceptance of International Accounting Standards in this study. These variables include the legal system, the taxation structure, the financial provider, and the manner of life.


Q1. Define Financial accounting.

Ans. It is the most popular method of efficiently documenting, analysing, and exposing a substance's monetary exchanges so that such reports and information may be used by the element's partners.

Q2. What is a source document?

Ans. A source record captures crucial information about an exchange, such as the names of the parties involved, the amounts paid (if any), the date, and the nature of the transaction. Because source reports are frequently associated with a new number, they can be split in the accounting system.

Q3. What is common about source documents?

Ans. Source reports are frequently associated with an unusual number to be isolated in the accounting system.

Q4. What are the factors that affect accounting sources?

Ans. The factors affecting the accounting source are the legal system, tax collection system, provider of finance, and culture.

stem, provider of finance, and culture.

Updated on: 23-Aug-2023


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