Mexico Under NAFTA: Accounting Information In a Changing Economy
Rivera, Juan M.
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Mexico has successfully implemented policies to open foreign trade, stabilize the Peso, control inflation, deregulate private business, scale back state enterprises, eliminate bureaucratic red tape, and welcome foreign investment. This process started before NAFTA was considered; however, NAFTA helped in making these economic changes more permanent. Given a more propitious business environment, understanding the financial in-formation reported by Mexican firms constitutes a relevant inquiry. This paper analyzes features of the accounting model used in that economy and compares them against the characteristics of its counterpart accounting practice in the U.S. As a whole, the Mexican accounting practice has achieved a reasonably good level of competence. In their quest to find solutions to problems and issues not yet covered by their accounting norms, the Mexican Accounting Principles Com-mittee has paid close attention to the U.S. GAAP and to the principles advanced by the International Accounting Standards Committee. A new Law of the Secu-rities Market has added mechanisms to guarantee a healthy operation of the secu-rities market and to increase the transparency of transactions and financial disclo-sures of the companies whose securities are traded in the exchanges. All this is a reflection of the new open economy and free market mechanisms embraced by the Mexican government.