chapter 2 international accounting patterns, culture and development

Click here to load reader

Download Chapter 2 International Accounting Patterns, Culture and Development

Post on 13-Dec-2015

227 views

Category:

Documents

1 download

Embed Size (px)

TRANSCRIPT

  • Slide 1

Chapter 2 International Accounting Patterns, Culture and Development Slide 2 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Classification of Accounting and Reporting Systems Classification aids in Describing, analyzing, and predicting the development of accounting systems Strategic planning and control decisions International systems integration The Challenge? Adapt past effective techniques to meet the demands of the global market Must understand international traditions and heritage Slide 3 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Purposes of International Classification Describe and compare international systems Improved understanding of Similarities and differences of systems Development of systems and potential for change Dominance of some systems over others Assess issues of international harmonization Identify and solve problems Slide 4 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Purposes of International Classification Developing countries will be informed of systems in other countries Aid international accountants and auditors Problems with accounting and control systems for MNEs understood and solved Slide 5 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Classification Research Deductive or judgmental approach Environmental factors identified and linked to national accounting practices International groupings or development patterns are proposed Inductive or empirical approach Individual practices analyzed Development patterns or groupings identified Explanations based on economic, social, political, and cultural factors proposed Slide 6 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Deductive approach Muellers four approaches to accounting development Macroeconomic pattern Business accounting is tied to national economic policies Examples: Sweden, France, Germany Microeconomic pattern Accounting is a branch of business economics Example: replacement-value accounting in Holland Slide 7 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Deductive approach Muellers four approaches to accounting development Independent discipline pattern Accounting is a service function derived from business practice Examples: U.S. and U.K. Uniform accounting pattern Accounting is an efficient means of administration and control Examples: France, Germany, Sweden, Switzerland Slide 8 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Nobess Hierarchial Classification Slide 9 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Inductive Approach Nair and Frank (1980) findings 1973 data Four measurement groups British Commonwealth Latin America Continental European U.S. Seven disclosure groups Could not be plausibly described No explanation offered for difference in groupings Slide 10 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Inductive Approach Nair and Frank (1980) findings Differences between measurement and disclosure groups Hypotheses not supported Cultural and economic variables associated with disclosure practices Trading variables associated with measurement practices Overall little attention given to influence of culture Slide 11 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Cultural Influences on Accounting Systems Culture, Societal Values, and the Accounting Subculture Fig. 2.3 Slide 12 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Structural Elements of Culture Hofstede 4 Underlying societal dimensions Individualism Power Distance Uncertainty Avoidance Masculinity Countries grouped into culture areas Hofstede and Bond 5 th dimension Confucion Dynamism Slide 13 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Hofstedes Societal Dimensions Individualism versus Collectivism Peoples self-concept: I or we Large versus Small Power Distance How a society handles inequalities among people Strong versus Weak Uncertainty Avoidance Control the future or just let it happen Masculinity versus Femininity The way a society allocates social roles to gender Confucian Dynamism Short-term or long-term orientation Slide 14 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Accounting Values Gray Professionalism versus statutory control Uniformity versus flexibility Conservatism versus optimism Secrecy versus transparency Slide 15 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Professionalism versus Statutory Control Accountants are perceived to have independent attitudes throughout the world Public regulation or self regulation U.K. rely on judgment of accountant France and Germany implement detailed legal requirements Link to societal value dimensions Professionalism Individualism Weak uncertainty avoidance Small power distance Masculinity Short-term orientation Slide 16 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Uniformity versus Flexibility Uniform accounting plan and imposition of tax rules for measurement purposes France and Spain Facilitate national planning Pursue macroeconomic goals Intertemporal consistency and some degree of intercompany comparability b/c of flexibility U.S. and U.K. Link to societal value dimensions Uniformity Strong uncertainty avoidance Collectivism Large power distance Slide 17 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Figure 2.4 Culture and Accounting Systems in Practice Slide 18 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Authority and Enforcement Slide 19 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Conservatism versus Optimism Conservatism seen as a fundamental value Strongly conservative Japan, France, Germany, Switzerland Less conservative U.S., U.K., the Netherlands Link to societal value dimensions Conservatism Strong uncertainty avoidance Long-term orientation Collectivism Femininity Slide 20 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Secrecy versus Transparency Stems from management and accountants Closely related to conservatism Secrecy relates to disclosure Conservatism relates to measurement Secrecy High Japan, France, Germany, Switzerland Low U.S. and U.K. Link to societal value dimensions Secrecy Strong uncertainty avoidance High power distance Collectivism Femininity Slide 21 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Accounting Values and Societal Values Slide 22 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Accounting Values and International Classification Accounting values most relevant to professional or statutory authority and enforcement Professionalism and Uniformity Both concerned with regulation and degree of enforcement or conformity Accounting values most relevant to measurement and disclosure Conservatism and secrecy Country groupings Optimistic and transparent Conservative and secretive Slide 23 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Accounting Values and International Classification Slide 24 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black International Pressures for Accounting Change Growing international interdependencies Harmonization of the regulatory framework internationally Centrally planned economies embraces market-oriented approach Former U.S.S.R., Eastern Europe, China New opportunities for international investment, joint ventures, and alliances Slide 25 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Economic Groupings and International Organizations European Union Promotes economic integration/harmonization UN World Bank International Monetary Fund UN conference on Trade and Development World Trade Organisation OECD Foster international economic and social development in industrialized countries Code of Conduct for MNEs Slide 26 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Impact of MNEs and Globalization Cultural and social Employment and consumption patterns Significantly influenced Pressure for more accountability Environmental impact Slide 27 International Accounting & Multinational Enterprises - Chapter 2 - Radebaugh, Gray, Black Impact of MNEs and Globalization OECD, EU, IOSCO work for harmonization and internationalization of securities markets IASB and the International Federation of Accountants (IFAC) Professional organizations involved in harmonization

View more