Before the Spanish conquest within the 1500s, Mexico was home to a number of highly
advanced cultures, such as the Olmecs, Mayas, Toltecs, and Aztecs. Hernando
Cortés conquered Mexico within 1521 and founded a Spanish colony that lasted with regard to
nearly 300 years. Mexico| declared independence in 1810, as well as an 1821 treaty recognized
its self-reliance from Spain. Except for 30 years of internal peace under
General Porfírio Díaz (1877 to 1880 and 1884 to 1911), Mexico experienced political
and military strife until 1929, when what is now known as the Institutional
Groundbreaking Party (PRI) was formed. The actual PRI controlled Mexico’s government
continuously with regard to 70 years. The 2000 presidential election was won by the National
Action Party (PAN), a center-right opposition party, thus ending the supremacy of
the PRI in Mexican politics.
Mexico is the most populous Spanish-speaking nation in the world and the
second the majority of populous country in Latina America (after Portuguese-speaking Brazil).Twenty
Mexico has a largely free-market economic climate: Government-owned or controlled companies
master petroleum and public resources, but private enterprise rules manufacturing,
construction, mining, amusement, and the service industries. Within recent
years, the government continues to be privatizing its holdings in nonstrategic industries.Free-market economic reforms during the 1990s helped reduce inflation, increase the
rate of economic growth, and deliver healthier economic fundamentals. The reforms
included dismantling protectionist trade barriers, opening up to foreign investment,
and signing regional trade agreements. The most important agreement for South america is
the North American Totally free Trade Agreement (NAFTA), signed along with Canada and the
United States within 1994. The United States accounts for almost half of Mexico’s imports
and 85 percent associated with Mexico’s exports. Mexico has the world’s fourteenth-largest economy
(in terms of gross domestic product).
Family-controlled conglomerates dominate Mexico’s private sector as well as, by
world standards, tend to be relatively small. Although Mexico’s stock exchange is the second
largest within Latin America, it is still fairly small by international requirements, because
firms prefer to raise investment capital through debt rather than collateral. Given the dominance
of family-controlled enterprises, Mexican companies traditionally guarded their
information and were secretive in their financial reporting. This is changing, however,
and more and more Mexican firms are entering U.S. capital markets. Disclosure
practices of Mexican companies are increasingly influenced by the expectations of the
U.S. market.
The U.S. affect on Mexico’s economy extends to accounting. “[M]any from the
early leaders of the Asian profession grew up on ‘American accounting,’” and
U.S. books and professional literature (in both the original English or converted
into Spanish) are used thoroughly in the education of accountants and as guidanceon accounting issues. NAFTA accelerated a trend toward closer cooperation between
professional accounting organizations in Mexico, Canada, and the United States.
As a founding member of the International Accounting Standards Committee
(now the International Accounting Standards Board), Mexico is also committed to
convergence with IFRS. Mexico now looks to the IASB for guidance on accounting
issues, especially in cases where there is no corresponding Mexican standard.
