Nobes (1998) reformulates his earlier classification and proposes a
categorization of accounting systems based on the strength of the equity
market in each country. He argues that the prevalent financing system
drives the function of accounting and, thereby, defines the properties
of the accounting system. His updated classification of accounting systems
into strong equity, commercially driven (“Class A”), and a weak
equity, government driven, tax dominated (“Class B”) systems, closely
follows the earlier micro-based versus macro-uniform distinction, with
UK and US GAAP forming the strong equity group and French, German,
and Italian GAAP making up the weak equity group. In 2008, Nobes expanded
his taxonomy to include all EU member countries not included
in his earlier paper. Panel B of Table 1 displays his categorization.