Challenges in international auditing;

              Challenges in International Auditing
by JOHN W. QUEENAN Partner, Executive Office
Presented before the University of Illinois Seminar on International Accounting, Urbana—May 1964
ONLY the American and British accounting firms extend their practice to foreign soil to any great degree. This paper will relate primarily to the Americans, although there are many problems common to both American and British firms practicing on a world-wide basis. Differences in tax laws and legal systems in general, language barriers, different currencies, finding and training personnel, strong nationalistic feelings in many countries, differences in accounting principles and auditing standards, are illustrations of some of the common problems.
You might logically ask why auditors undertake to practice in a foreign country in the first place. The answer is that the accounting pro­fession
of any community exists because of the needs of business of that community for accounting and auditing services, and the accountant must be in a position to look after the needs of his client wherever in the world the client chooses to establish operations. You might also logically ask why it is not feasible for the accounting profession in any given country to attend to the accounting needs of any business operating there, whether foreign-owned or not. The answer is that when American capital (and British capital) began to go abroad shortly after the turn of the century, the accounting profession in most foreign countries had not developed to the point of being able to render proper services; this is still true of many countries today. Perhaps the overriding reason for the extensive international practice of American accounting firms is the attitude of American boards of directors who wish to look to one firm as having over-all responsibility for the entire engagement.
Naturally it will not be possible to go into the full range of problems the American firm encounters abroad, but I shall treat a representative few that I trust will interest you.
DIFFERENCES IN ACCOUNTING PRACTICES
The increasing volume of international investment, credit, and trade has resulted in increased attention to ways and means of achieving some desirable uniformity in international accounting practice. Regardless of the desirability of some international uniformity, we at this moment must face the realities: There are differences in accounting practices, and this is the area which I shall briefly describe.
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