International comparative accountings

Résumé du document

In this document, we assess to what extent differing national cultures are relevant to an understanding of the reasons for accounting differences, and therefore to the process of classification of countries. According to the dictionary "culture" refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes meanings, hierarchies, and religion. Culture is also referred to as the systems of knowledge which are shared by a relatively large group of people. In this essay, we will focus on the culture of a nation as a whole and not take into account the culture of an individual person. As far as "accounting differences" are concerned, we should understand that we are dealing with the differences in accounting systems. As it has been mentioned in an Australian review, accounting systems belong to four defined systems which are: legal, corporate financing, financial reporting and corporate governance.

Extraits

[...] On another hand, Gray in his second figure put in relationship optimism versus conservatism and secrecy versus transparency. Making a relation between measurement practices and the degree of disclosure gives us as below a division of culture area groupings showing real differences between cultural groups. Consequently, as in the first figure Anglo-Saxon countries and less developed Latin countries are strictly opposed, as Anglo- Saxon countries are dominated by optimism and transparency (high degree of disclosing information and a higher risk-taking approach), and as less developed Latin countries are more characterized by secrecy and conservatism. [...]

[...] With the point of view of Gray, if we take the examples of professionalism and uniformity, these points will affect the quality of accounting information. To illustrate this point of view we can focus on power distance in a relationship with accounting errors. In national cultures where the power distance is large, the society will be led by a centralized power (Wong and Birnbaum-More, 1994), and the company faces a big difference in terms of wages between employers and employees, indeed, a big difference of education level between both. [...]

[...] Impact of culture on accounting, another point of view Culture is a relevant environmental factor which has an impact on accounting practices but on management control practices too. For this reason we can underline the fact that the cultural background rules the preferences for accounting practices and management control systems (Birnberg and Snodgrass 1988). Accounting differences linked to differing national cultures could also be linked by examining accounting errors highlighted by audit. So, specific cultural dimensions could explain the differencing in accounting errors for firms and consequently well illustrate how accounting practices are affected by national cultures. [...]

[...] After having well defined what are the main points of the subject, the purpose will be to define how differing national cultures are relevant to an understanding of the reasons for accounting differences and after understand the significance of differing national cultures with the process of classification of countries. In order to answer this question efficiently, I will develop as better as I can focusing me on how we define national cultures dealing with business approach using some theories and how it has an impact on accounting further and at the end show that these theories could be applied for the classification of countries. I. National cultures: How do they differ? [...]

[...] As it has been mentioned before, the approach of Hofstede is relevant to understand the impact of national cultures on the society first to finally get the relationship on accounting differences. For this, we have to highlight the structural elements of culture which have an impact on working behavior, this why Hofstede perceived four major elements of a common structure in cultural systems which are: - Individualism versus collectivism, does people cares more about them self than on the collectivity welfare? [...]