In countries where companies tend to rely more on banks for funding, accounting rules are framed such that assets are valued conservatively to protect a bank's investment.

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In countries with a financial system that is more bank-oriented, accounting rules often emphasize conservative valuation of assets to ensure the protection of banks' investments, as banks are the primary source of funding and have a vested interest in the financial health of borrowing companies.

In Countries Where Companies Tend to Rely More on Banks