Accounting standards usually reflect country?s national culture, ideals and politics. Standards are also influenced by the relationship between people who produce accounting statements and people who use them in a given country.

There are four basic accounting models that are used around the world today: Anglo American, Continental, South American, and Mixed Economy. The Fifth model that tries to unify the other models into a single global perspective has also begun to develop n recent years.

Anglo-American model.
Model focuses on the information needs of the investors and creditors. The stock markets in countries that follow this model are usually large and well developed, and companies rely heavily on securities to raise the capital they need to do business. The accounting practices for multinational corporations are quite sophisticated under this model. Anglo-American model is common in the United States, the United Kingdom, the Netherlands, Hong Kong, Mexico, and South Africa.

Continental model.
The close relationship between business and the banks and governments is the main characteristic of the countries that use this model. Accounting practices are legalistic and conservative, and the emphasis is more on government policies than investor decision-making needs. Belgium, France, Germany, Italy, Sweden, Switzerland, and Japan operate under this model.

South American model.
This accounting model developed in response to high inflation in many countries and also reflects significant government control over business accounting practices because it is geared mostly toward the reporting of taxable income. As such, accounting guidelines are strict so the governments ensure that businesses pay the tax for which they are responsible. Most countries in South America subscribe to this model, including Argentina, Brazil, and Chile.

Mixed Economy model.
This accounting model is a result of the political and economic changes in Eastern Europe and the former Soviet Union in the late 1980s and early 1990s. Many businesses maintain two types of records in order to respond to the remnants of central government planning and control as well as market-oriented pressure,. The first, which tracks information that is essential in a tightly controlled economy, is designed for company managers and focuses on production and employment budgets rather than financial results. The second set of records is intended for investors and creditors, and it provides information similar to that provided by the Anglo-American model. Countries that follow this model include Russia, Poland, Hungary, and Romania.

International Standards.
Many multinational corporations are working toward a new model that standardizes and streamlines certain accounting practices on a global level in order to harmonize the various (sometimes contradictory) accounting models around the world. This model makes the most sense for companies that raise capital in foreign markets because it allows them to follow one method of reporting, regardless of the source of their operating income and capital funding. One body that currently sets international standards followed by many corporations is the International Accounting Standards Committee (IASC). These standards take into account changes in prices or foreign currency, investments in subsidiaries, and so on, making it easier for multinational corporations to accurately represent their information. However, corporations are still required to follow their local country standards, even if they use the international standards as well.

Stock Markets.
To diversify the holdings and to take advantage of high potential returns in other countries investors invest their funds both domestically and internationally.
Factors that affect the ability and desire of an individual investor to tap into particular foreign markets: : investment restrictions; information barriers (language, disclosure, accounting); and high taxes and transaction costs. Such obstacles tend to be most common in emerging markets, such as Eastern Europe and parts of Asia.

Restrictions.
Many countries impose restrictions on the flow of money into and out of the country and on investments in industries that are of significant importance to the nation. Such policies can decrease the efficiency of a country's capital markets, and they make it difficult for investors to determine the true value of a country's investment opportunities. This results in decreased potential returns for investors. Malaysia example that prohibit investors from taking the proceeds of the sale of their investments out of the country for at least 12 months. This restriction limits an investor's options once he has invested in Malaysia and therefore potentially limits returns as well.

Information barriers.
Flow of information is very very important for investment decisions. The less information there available for an investor, the more difficult investing can be. Investor may decide not to invest in markets where he cannot get reliable information quickly. For example, analyzing investment opportunities in Continental Europe and South America is often quite challenging because of the many different languages and accounting standards that exist in those regions.

Costs.
Individual investor's access to some markets also limited by taxes and high transaction costs. For example, investors in Japanese equities are penalized high fees for transactions that involve a small number of shares. In addition, many countries impose a withholding tax on all income taken out of a country by a foreign investor.

Despite significant obstacles, the number and value of cross-border investments has increased dramatically in recent years, due in part to the high rates of growth in emerging markets. To reduce the risks and avoid some of the complications of making foreign investments, individuals often rely on professionals and investing institutions to make their investment decisions for them. As an example, individuals can purchase shares of mutual funds that focus on particular overseas markets, e.g. an emerging market mutual fund.