There are very few countries in the world which do not require accounts to be maintained and submitted to a regulatory authority in a specified format. The majority of countries have tried to modernize accounting standards and bring them into line with international good practice. Similarly, countries have tried to implement international auditing standards. The significant majority of countries have a regulator who is specifically responsible for regulating accounting and auditing requirements. In general, there is also one (or more) professional body dealing with accounting standards and regulation of accounting and auditing firms.
In addition, there are likely to be Government imposed regulations covering the format and production of financial statements as well as audit requirements. Frequently, these will specify the particular books and records to be maintained. To ensure compliance with accounting and auditing standards, therefore, requires compliance with all these different regulations generally stemming from these three sources. In many countries accounts lodged with regulators may be available for the public to view, even for a private company.
Most countries also have tax regulations requiring the preparation of financial statements in a particular format for the computation of tax liabilities. Please see "Corporate Taxes"" for more information on this.
Generally accounts are required in local regulatory format once a year. However, some require certain information to be presented quarterly (e.g. Spain) and some require it monthly (e.g. Italy, China).
Usually there are two choices: management accounts can be prepared to local Generally Accepted Accounting Policies (GAAP) or they can be prepared to the parent companies GAAP e.g. US GAAP. The first is what a local services provider would prefer since it saves the provider time in preparing the local statutory accounts. However, it naturally causes very significant problems at the parent company end in trying to consolidate accounts for monthly presentation to the Board.
In addition, it creates problems since conversion of the local output into US GAAP (or whatever group level format is required) will be required to help the parent company quantify and disclose their cross-border tax liabilities under various reporting standards.
The preferred route is to prepare accounts to the parent companies GAAP. The obligation is on the service provider to convert the accounts to local GAAP at year end or more frequently.
Regulations will also generally differ based on size of company, with requirements becoming less stringent for smaller businesses. When checking requirements, therefore, it is important to check it for the correct entity size and review this each year.
Many countries will require local accounts to be in local currency and / or local language e.g. Italy requires both that accounts are maintained in Euros and in Italian.
These are general guidelines, for more information on your specific country or situation, please connect with us.