How Culture Affects Financial Reporting And Auditing With The Support Of Classic Culture Theories And Facts

Globalization has been changing the world. It has interconnected people, nations, and even businesses. Today´s business can share information to investors around the world thanks to the intelligent software of the actual society. Being more specific, the way in which investors and users evaluate businesses performance is through the information contemplated in their financial statements. These financial statements illustrate the current assets, liabilities, and stockholder equity a company has in order to help users take economic decisions. However, not all the companies are regulated to provide the same structuralized information around the world. Each country possesses its own accounting standard that regulates the preparation of financial statements of a company. In that way, companies’ information might differ between countries making the comparability between financial statements difficult to be implemented by users in order to assess the performance of foreign businesses. In view of the need of a globally accepted accounting standard that promotes uniform standards for worldwide financial reporting, the International Accounting Standards Committee (IASC), which then becomes replaced by the International Accounting Standard Board in 2001, was created (Cathey and Schroeder 130). The IASB issues International Financial Reporting Standards (IFRS) that stands as the set of accounting standards that prepare and present the financial

The field of accounting is constantly evolving. This is true not only for the theory of accounting itself but also the entities that govern its theory and practice. Presently, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are faced with some of the biggest challenges to date. To understand the significance of these two boards, it is necessary to understand their histories, relations between the boards, and the standards that they set. Also how the knowledge of these boards and the field they lead, gained through the masters of science in accountancy

This research project will inform the reader of the difference between the United States accounting standards and International accounting standards. The United States uses the Financial Accounting Standards Board (FASB) to issue financial reporting procedures. The International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB). There are proposals for the United States to adopt the International standards. Financial reporting procedures are debated about the United States using the Generally Accepted Accounting Procedures (GAAP) or following the global procedures. This

During the PRE-IFRS accounting system and where worldwide accounting diversity was widespread, a number of PRE-IFRS developmental factors were found to be the cause behind international differences in ownership and financing of companies and led to differences in the financial reporting practices of multi-national corporations (MNCs). This type of environment created extensive opportunities for corruption and poor performance and made it hard to compare global companies. The following four main PRE-IFRS development factors have the biggest impact on international business accounting practices: source of finance, legal system, taxation system and political and economic ties (Meek & Saudagaran, 1990). Even though the International Financial

As the complexity of our financial economy develops it is important that our accounting standards progress in accordance. Accounting is very important to the development of the global and local economies. Accounting is basically the gathering, summarizing and presenting of financial information of an entity to interested internal, external and possible investors. This information should be presented in a non-bias way so that other people are able understand.

Why do we study comparative accounting? Countries around the world have different aspects such as taxation, legal systems, culture and colonial influence that differ the way accounting is reported. Ultimately the need for fair presentation is the final objective to comparative accounting. Thousands of years ago when accounting was first practiced, each country practiced financial reporting according to the power and strengths in their country, regardless of how accounting was reported in neighboring countries. Nowadays, because the world is becoming more globalized and harmonized, standard-setters feel the need to report their accounting in a uniform way. The International Accounting Standards Board [IASB] was formed as a non-for-profit

For nearly half a century, a movement has been underway to establish a high-quality, comprehensive set of international accounting standards, with the goal of facilitating international trade and investment. In the global capital market, differences in the rules of accounting for the purposes of recognition, measurement, and reporting of financial results have impaired the smooth transfer of information across borders. Given that it accounts for nearly a third of the global market, there is considerable pressure for the United States to conform to the International Financial Reporting Standards (IFRS), as promulgated by the International Accounting Standards Board (IASB). While moving to a single set of accounting standards could create

The importance of information and work in the realm of accounting requires all accountants to remain consistent in standards and ethics. However, perception of an entire culture can shift as seen in the Arthur Anderson debacle in 2002 and the establishment of Sarbanes-Oxley Act (SOX). Also, there is the ongoing concern of global companies attempting to adhere to the same standards and ethics, when social standards differ around the world. Studies show that, “people from different cultures can be expected to hold different implicit theories, which lead to divergent cognitive processes and behavior” (Wong-On-Wing and Lui, 2013, p. 17). Therefore, having an understanding of each ethical system has never been more crucial in organizational culture in the accounting profession. “Accounting ethics incorporate social standards of behavior as well as behavioral standards that relate specifically to the profession”

Societal values and culture affects a company 's accounting system because it pertains to the comprehensive changes in the technology, process, ideas, commodities, and services that are more effective to the use of the society particularly to bring out positive impact to improve the business process, infrastructures, government, technologies, and all other vital parts of a certain nation. In this manner, the presence of innovation represents positive transformation that improves the quality of life for the humanity for attaining their goals successfully in a specific period of time specifically across combined companies. Business perspective, globalization is an effective process because it helps all kinds of public and private institutions have the capability of transforming innovations into economic materials that are essential to improve the integrity of the operating enterprise. In the

Using positive approach for describing and predicting accounting practice, and consequently, developing the accounting theory, has led to sufficient support for accounting information. In fact most of empirical accounting research has shown that accounting numbers and figures can lead to changes in the capital market features. This creates a lot of sensitivity towards accounting information. In most countries, the funds necessary for the activities of the financial accounting standard board are provided by the representatives in the parliament. If accounting standards endanger the wealth of these representatives, the budget of the board will be limited and consequently the wealth of the members of the board will be at risk. Accordingly, accounting enters a realm of

Global interdependence and the existence of large multinational enterprises create a need for global accounting. Multinational corporations are companies that carry out business in more than one country other than their home. Companies go global for many reasons: to increase sales, improve profits and innovation. Decentralization is essential for the creation of large firms, because CEOs are otherwise constrained in the number of decisions they can make directly -- it is therefore critical for enabling productive firms to grow large and to take market share from unproductive ones. Because trust is strongly linked with more decentralization, it in turn affects productivity. The absence of trust, in developing countries like Brazil, China, and India, explains why productive firms do not grow large and drive out unproductive firms from the market place. Decentralization presents problems within itself. With this, Management accounting is a system of measuring and providing operational and financial information that drives management’s actions in areas of actions and behavior. Unlike financial, managements accounting generates reports for personnel inside the organization, not stakeholders. It’s purpose is to an organization reach its strategic objectives. Internationally the primary strategic goals of managerial accounting are global efficiency, multinational flexibility and worldwide learning. This initiates emphasis on planning and control.

The business environment appears to get smaller with each passing day. Therefore, accountants face troubles in remaining protected from the progressions that occur around the world (Diaconu and Coman 2006). Globalization hint at the regularly changing procedure of incorporation and connection among governments, individuals and organizations. The key three things that declare incorporate globalization venture, worldwide exchange and data innovation (Diaconu and Coman 2006). Globalization moves the world to another level and places it to more at the leading edge statures reliably. Outstandingly, globalization procedure have both negative and constructive effects on accounting (Godfrey and Chalmers 2007). This is unmistakable as in,

Globalization is a fact of life in today’s worldwide economy. They are many barriers to achieving a true global market; one of these barriers has to do with accounting standards or the presentation of accounting information. Various users have diverse needs for financial information. Companies in different parts of the world had their own methods in preparing their financial statements. Trying to compare the accounting rules of these different companies would have been difficult. As a result, accounting bodies were created in order to standardize the accounting principles in order to avoid any difficulties in the future and make these methods comparable and uniform. As a

It is undeniable that competition in the business area is very fierce. People in the business world must find the best way in order to survive. Business, nowadays, expand their business to other countries as globalization on the rise. They need to remain competitive in a global marketplace with well coordinated and tightly controlled worldwide operations. For multinational enterprises (“MNEs”), the corporate culture is one of the core elements bringing success to its businesses. Yet, cross-cultural conflicts also could hinder the MNEs from optimizing its worldwide operations. In this paper, we will discuss how corporate culture influences

The paper objectives is to determine the impact of differences between UK accounting standard and International accounting standards to the decisions of investors and make some recommendations, hoping to give investors a comprehensive view and a more accurate when they make investment decisions. The research only mentions differences affect to the investment decisions instead of go deep into analysis the entire differences between the two accounting standards. Nghiên cứu đưa ra