1. Accounting & Culture International Differences

2. Manifestations of Culture Symbols Symbols

3. Manifestations of Culture Symbols Symbols Heroes Heroes

4. Manifestations of Culture Symbols Symbols Heroes Heroes Rituals Rituals

5. Manifestations of Culture Symbols Symbols Heroes Heroes Rituals Rituals Values Values

6. An Early Cultural Model UniversalismParticularism Focus of obligation SocietyFriendship and family Value orientation Tend to value individual freedom, mobility, competition and achieved status Tend to value collective good over individual good. Status related to friendship and family ties rather than achievement.

7. An Early Cultural Model UniversalismParticularism Employee relations Impersonal relationships between employees. Loyalty to firm expected. Individuals have obligations to society. Individuals primarily in terms of their relations with others. Impersonal and objective evaluations are rare. Loyalty to individuals rather than firm or society. Employee motivation High need for achievement, desire for advancement through achievement Low need for achievement, lack of desire for additional responsibility (since failure is possible)

8. An Early Cultural Model UniversalismParticularism Management techniques Reliance on individual discretion and responsibility. Nepotism perceived as undesirable Nepotism may be viewed as desirable. Western techniques may be dysfunctional. Accounting & business disclosures Managers committed to making relatively reliable information disclosures – including some voluntary disclosures not required by law or GAAP. Meet legal standards. Less likely to make voluntary disclosures because there is no perceived obligation to society and disclosure is not central to family interests.

9. Individualism  Collectivism This dimension relates to the degree of integration a society maintains among its members or the relationship between and individual and his or her fellow This dimension relates to the degree of integration a society maintains among its members or the relationship between and individual and his or her fellow Individualism Preference for a loosely-knit social framework. Individuals are expected to take care of themselves and their immediate families only. Collectivism Preference for a tightly- knit social framework in which individuals can expect their relatives or other in-group to look after them in exchange for unquestioning loyalty.

10. Power Distance This dimension relates to the extent to which the members of a society accept that power in institutions and organizations is distributed unequally. This dimension relates to the extent to which the members of a society accept that power in institutions and organizations is distributed unequally. Small Power Distance People tend to strive for power equalization and demand justification for the power inequalities that do exist. Large Power Distance People tend to accept a hierarchical order in which everybody has a place which needs no further justification.

11. Uncertainty Avoidance This dimension relates to the degree to which the members of society feel uncomfortable with uncertainty and ambiguity. The fundamental issue is how a society reacts to the fact that the future is unknown. This dimension relates to the degree to which the members of society feel uncomfortable with uncertainty and ambiguity. The fundamental issue is how a society reacts to the fact that the future is unknown. Weak People feel relatively secure and do not try to control future through laws. More tolerance for deviant ideas and behavior and willingness to take risks. Strong People feel anxious about future and create institutions to add security and avoid risk. Associated with formal and informal rules to guide behavior.

12. Masculine  Feminine This dimension relates to the division of the roles between sexes in society. This dimension relates to the division of the roles between sexes in society. Masculine Societal preference for showing off, achievement, heroism, assertiveness, making money, thinking big, etc. Competitiveness. Concern for equity rather than equality. Feminine Societal preference for putting relationships with people before money, helping others, caring for the weaker, the quality of life, preservation of the environment, “small is beautiful” and so on.

13. Accounting Values Professionalism Professionalism Uniformity vs. Flexibility Uniformity vs. Flexibility Conservatism Conservatism Secrecy vs. Transparency Secrecy vs. Transparency

14. Relationship of Culture to Accounting Values Hypothesis: High individualism, low uncertainty avoidance, and low power distance is associated with professionalism. Hypothesis: High individualism, low uncertainty avoidance, and low power distance is associated with professionalism. Hypothesis: High uncertainty avoidance, high power distance, and low individualism is associated with preference for uniformity. Hypothesis: High uncertainty avoidance, high power distance, and low individualism is associated with preference for uniformity.

15. Relationship of Culture to Accounting Values Hypothesis: High uncertainty avoidance, low individualism, and low masculinity is associated with preference for conservatism. Hypothesis: High uncertainty avoidance, low individualism, and low masculinity is associated with preference for conservatism. Hypothesis: High uncertainty avoidance, high power distance, low individualism, and low masculinity is associated with a preference for secrecy. Hypothesis: High uncertainty avoidance, high power distance, low individualism, and low masculinity is associated with a preference for secrecy.

16. Standard Setting & Culture Hypothesis: The particular standard- setting process in each country is a function of the economic, political, and social environment, i.e., the country’s culture and traditions. Hypothesis: The particular standard- setting process in each country is a function of the economic, political, and social environment, i.e., the country’s culture and traditions. Bloom, Robert and M. A. Naciri. 1989. “Accounting Standard Setting and Culture: A Comparative Analysis of the United States, Canada, England, Germany, Australia, New Zealand, Sweden, Japan, and Switzerland,” The International Journal of Accounting Education and Research 24 (1) 70-97.Bloom, Robert and M. A. Naciri. 1989. “Accounting Standard Setting and Culture: A Comparative Analysis of the United States, Canada, England, Germany, Australia, New Zealand, Sweden, Japan, and Switzerland,” The International Journal of Accounting Education and Research 24 (1) 70-97.

17. Dimensions 1. Extent to which standards are mandated by law 2. Whether a conceptual framework is used 3. Extent to which standard setters are independent of accounting profession 4. Whether the standard setting process is open or secret 5. Whether exposure drafts and discussion memoranda are circulated 6. Whether public hearings are held 7. How decisions are made (e.g., simple majority, two-thirds in favor, consensus, etc.) 8. Whether external tasks forces are used and whether research is conducted

18. Viability of Standard Setting Agencies Viability = ability to cope successfully with the environment. Viability = ability to cope successfully with the environment. Stability is a function of resources and structure: Stability is a function of resources and structure: More resources available  More stableMore resources available  More stable Diffused structure vs. Compact structure Diffused structure vs. Compact structure Compact (centralized) structure tends to be more stableCompact (centralized) structure tends to be more stable Plasticity Plasticity To be more plastic means that there are more possible combinations or ways to respond to environmental change.To be more plastic means that there are more possible combinations or ways to respond to environmental change. Being independent of special interests indicates more plasticity.Being independent of special interests indicates more plasticity. Having mechanisms to deal with the changing environment is another indication of plasticity.Having mechanisms to deal with the changing environment is another indication of plasticity.

19. Table 1 from a 1994 article

20. Accounting & Interaction of Social Organizing Principles

22. Modes of Regulation Liberalism Liberalism Legalism Legalism Associationism Associationism Corporatism Corporatism

23. Modes of Regulation Germany Sweden U.S. U.K.