FEATURE
PAPER
Testing
the Theory of Cultural Influence on International Accounting
Practice
The
following paper was presented at the 2007 Allied Academies
International Conference - Jacksonville. It was written
by Nigel Finch of Macquarie Graduate School of Management.
Abstract
The
issue of cultural influence in explaining behaviour in social
systems has been recognised
for some time, however its impact on accounting as a social
system is a more recent field of study. This
paper will examine the theory of cultural influence on the
international practice of accounting and
critique the research methodologies used to test this theory.
Introduction
- Measuring International Culture
Environmental
factors including legal systems, sources of external finance,
taxation systems,
representation by professional accounting bodies, historical
inflation, economic and political events
are used to help explain international differences in accounting
practices (see Nobes and Parker, 2004,
pp. 17-31). Another environmental factor that is seen as an
influencer on international accounting
practice and financial reporting is culture.
Culture
may be defined as ‘the collective programming
of the mind which distinguishes the
members of one human group from another’ (Hofstede,
1980, p. 25). Each human group shares its own
societal norms, consisting of common characteristics, such
as a value system which is adopted by the
majority of constituents. Values are defined by Hofstede
(1980, p. 19) as ‘a broad tendency to prefer
certain states of affairs over others’. It is these
definitions that have been widely adopted in accounting
research to develop a cultural framework to investigate international
accounting differences.
Hofstede’s
(1980) work on culture represents the most extensive research
on national cultural
differences to date (Doupnik & Tsakumis, 2004). From
attitude surveys collected from approximately
116,000 IBM employees across 39 countries, Hofstede identified
four underlying value dimensions
along which each country can be positioned. These societal
values are: individualism versus
collectivism; large versus small power distance; strong
versus weak uncertainly avoidance, and;
masculinity versus femininity. Across these dimensions,
Hofstede’s
framework provides quantitative
measures for each of the sample countries. This broad sample
of quantitative data has attracted many
researchers studying cross-cultural differences because
the measures are seen as reliable for use as
independent variables in statistical analysis. Some of
these empirical studies will be examined later
in this paper.
Read
the Entire Paper...
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TIP
OF THE WEEK
Laws
and Legal Issues
What laws and legal issues may affect you entrepreneurial
venture? Do you have a working knowledge of the major laws
influencing your industry? Are there any legal laws on the
horizon that might impact you business, either positively or
negatively?
The following is a list of many federal laws common to all types of businesses:
Fair Labor Standards Act (FLSA)
• Addresses minimum wage and overtime.
Social Security
• Establishes a number of social programs that provide for the
material needs of individuals and families.
Federal Insurance and Contributions Act (FICA)
• Includes two separate taxes: social security and Medicare.
Taxes are paid by both the employer and employee (withheld
from wages).
Equal Pay Act (EPA)
• Prohibits discrimination in pay on the basis of sex where jobs
performed under similar conditions and require equal skill,
effort, and responsibility.
Immigration Reform and Control (IRCA)
• Requires employers to verify that applicants for employment
are authorized to work in the US.
Federal Unemployment Tax Act (FUTA)
• Provides workers payments for a given period of time or until
they find a new job, if job was terminated through no fault
of their own.
Occupational Safety and Health Administration Act (OSHA)
• Requires all employers to provide a workplace free from recognized
hazards that cause, or are likely to cause, death or serious
physical harm to employees.
Title VII Civil Rights Act
• Prohibits discrimination in hiring, firing, promoting, compensation,
or terms conditions, or privileges of employment on the basis
of race, color, sex, religion, or national origin.
Americans with Disabilities Act (ADA)
• Prohibits discrimination in employment on the basis of physical
or mental impairments that limit one or more major life activities.
Pregnancy Discrimination Act
• Prohibits discrimination in employment based on pregnancy,
childbirth, or related medical conditions.
Age Discrimination in Employment Act (ADEA)
• Prohibits discrimination against individuals over 40 with respect
to hiring, compensation, terms, conditions and privileges of
employment on the basis of age.
Older Worker Benefit Protection Act (OWBPA)
• Amendment to the Age Discrimination Act that prohibits discrimination
with respect to employee benefits on the basis of age.
Regulatory Flexibility Act (RFA)
• Requires federal agencies to review regulations for their impact
on small business and consider less burdensome alternatives.
Small Business
Regulatory Enforcement Fairness Act (SBREFA) of 1996
• Provides new avenues for small businesses to participate in
and have access to the federal regulatory arena.
Paperwork Reduction Act of 1980
• Requires that all proposed regulations be analyzed for the
paperwork they require and that paperwork be reduced to a minimum.
Small Business Paperwork Relief Act of 2002
• Institutes a process to make paperwork reduction a serious,
on-going effort and make it easier for small businesses to
comply with the law.
Consumer Protection Laws
• Ensure safety, fair labeling, privacy, and other matters.
Jerry
W. Moorman and James W. Halloran. Successful Business
Planning for Entrepreneurs.
2006. Thomson South-Western. pg.128-129.
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ANNOUNCEMENTS
Request for
Papers & Reviewer Volunteers
The
Small Business Institue is now requesting papers and paper
review volunteers for the Small Business Institute Journal.
If you are interested in submitting a paper or becoming a
volunteer, please let us know. The first issue
is to be printed April 2008. For more information please click
here or email us at sbij@uca.edu.
SBANC is Updating
Their Entrepreneurship and Small Business Network
The Small Business Advancement
National Center is currently updating their Entrepreneurship
and Small Business Network. If you currently teach or know
a professor in your
school or state that teaches an Entrepreneurship or Small
Business course, please provide us with any available information
at sbancj@uca.edu.
We appreciate any help. Thank you.
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