• John Flower
  • Gabi Ebbers


The importance of the USA for the study of global financial reporting derives principally from that country’s economic strength. The USA is by far the world’s largest economy. The five countries of the Pentad are in fact the world’s five largest economies, and together account for more than half of the world’s output, as measured by gross domestic product (GDP). The USA’s economy is by far the largest of the five, being some 50 per cent larger that of Japan, some three times larger than that of Germany, some five times larger than that of France and over six times larger than Britain’s. The USA is the principal driving force behind the globalization process that was described in Chapter 1. Its imports and exports are larger than those of any other country. It is a principal source of foreign direct investment (FDI) and also receives more FDI than any other country (see Exhibits 1.2 and 1.3). There are more American multinational enterprises (MNEs) in the top 100 than those of any other country (see Exhibit 1.4). These very numerous and powerful American MNEs are legally obliged to draw up their accounts according to United States Generally Accepted Accounting Principles (US GAAP). The term US GAAP stands for the totality of the rules that govern financial reporting in the USA. However the influence of US GAAP extends beyond the USA.


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© John Flower 2002

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  • John Flower
  • Gabi Ebbers

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