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1. The chapter identifies seven economic, histori- end of 2003: Austria, Belgium, Denmark,
cal, and/or institutional variables that influence Finland, France, Germany, Greece, Ireland,
accounting development: sources of finance, Italy, Luxembourg, the Netherlands, Portugal,
legal system, taxation, political and economic Spain, Sweden, and the United Kingdom. To
ties, inflation, level of economic development, encourage capital movement and capital for-
and education level. mation, the EU has issued various Directives
. designed to harmonize the generally accepted
Required: accounting principles of its member countries
a. Consider the case of Taiwan. Describe it on
the basis of these seven dimensions. Web Required: Which of the factors affecting
sites include the Encyclopaedia Britannica accounting development are likely to be the
Online ( and The World most serious obstacles to the EU harmoniza-
Factbook ( tion effort? What factors indicate that the EU
tions/the-world-factbook). harmonization effort can succeed?
b. Using this description, predict a general 5. Refer to Exercise 4. In May 2004, the EU
profile of financial accounting in Taiwan. expanded to incorporate 10 Central and
c. Go to the library and find a reference that East European nations: Cyprus, the Czech
describes accounting in Taiwan. Is your Republic, Estonia, Hungary, Latvia, Lithuania,
prediction accurate? Why or why not? Malta, Poland, Slovakia, and Slovenia.

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