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The Impact Of National Cultures On Accounting Differences And Classification

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.

12/11/2008

ABSTRACT
Culture was broadly ignored and was flooded in the concept of environmental factors influencing the accounting changes. However, research has shown that culture had a huge role in accounting development and changes. In this essay, we are going to develop Gray’s theory about the relationship between culture and accounting. This essay is mainly based on Gray’s theory as Gray was one of the first authors to explore the culture’s way to explain the changes in accounting. Prior to that demonstration we will define the concept of culture as it is seen by Geert Hofstede, as we judged that his definition of the concept of culture was the most acceptable in our analysis. Finally, we will show some exception to the Gray’s framework to criticize the real influence of culture on accounting systems.
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?

I. A definition of “culture” is important to assess its influence on accounting differences.
a. Culture definition based on Hostede’s work.
As there are as definitions of culture as there are authors who have worked on this topic, we chose along this essay to deal with Hofstede’s definition of culture. Thus Hofstede (1980, page 25) defines culture in that way: “the collective programming of the mind which distinguishes the members of one group to another”.

Culture is collective because it is shared at least by all the people from the same social environment and derives from it, that’s why culture is “learned” and not inherited.

In its Onion diagram (Hofstede, 1994, figure1.2, page 9), Hofstede differentiates the manifestations, shared by a group of people, of cultural...