Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Cultural impact on the harmonisation of Russian Accounting Standards with the International Financial Reporting Standards A practitioner's perspective

Cultural impact on the harmonisation of Russian Accounting Standards with the International... Purpose – The purpose of this paper is to explore cultural impact on the harmonisation of Russian Accounting Standards with International Financial Reporting Standards (IFRS). Design/methodology/approach – A theoretical review established that differences still exist between the two sets of accounting standards. For decades, Russia was a socialist state of planned economy. Accounting was a tool of centralised control, and accountants had a job of gathering information for statistical purposes of the government and tax authorities. This led to the development of a “Soviet culture” mindset. Accountants saw their jobs as following prescribed rules. Accounting is seen by Hofstede as a field in which historically developed practices are more important than laws of nature. It is therefore expected that accounting rules and the way they are applied will vary among different national cultures. Hence, Gray tried to explore how Hofstede's national cultural dimensions may explain international differences in accounting. With respect to past research in this area, Nobes argued that “national accounting traditions are likely to continue into consolidated reporting where scope for this exists within IFRS rules”. Ding et al. investigated the role of a country's culture and legal origin as an explanation for the differences between local Generally Accepted Accounting Principles (GAAP) and IAS as they were in 2001. The study gathered 53 Russian accountants' attitudes towards reporting under harmonised Russian Accounting Standards through semi structured interviews. Findings – The findings supported the theoretical view of a “Soviet culture” which has an impact on harmonisation of Russian Accounting Standards with the IFRS. Russia's high rankings in such cultural dimensions as power distance, uncertainty avoidance and collectivism have contributed to the development of certain preferences among Russian accountants. Those preferences were for statutory control, uniformity, conservatism and secrecy. Further findings indicate that accountants in Russia display reluctance to disclose financial information to the external users. One of the main reasons was found to be fear of disclosing too much information to competitors. Based on these findings, accountants in Russia display clear signs of preference for secrecy as opposed to transparency, as identified by Gray. Originality/value – One of the contributions of this study is to examine current perceptions of Russian accountants towards financial reporting under new harmonised Russian Accounting Standards based on Rozhnova's study. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Accounting & Organizational Change Emerald Publishing

Cultural impact on the harmonisation of Russian Accounting Standards with the International Financial Reporting Standards A practitioner's perspective

Loading next page...
 
/lp/emerald-publishing/cultural-impact-on-the-harmonisation-of-russian-accounting-standards-8LGCvRHrFo

References (61)

Publisher
Emerald Publishing
Copyright
Copyright © 2013 Emerald Group Publishing Limited. All rights reserved.
ISSN
1832-5912
DOI
10.1108/18325911311307195
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to explore cultural impact on the harmonisation of Russian Accounting Standards with International Financial Reporting Standards (IFRS). Design/methodology/approach – A theoretical review established that differences still exist between the two sets of accounting standards. For decades, Russia was a socialist state of planned economy. Accounting was a tool of centralised control, and accountants had a job of gathering information for statistical purposes of the government and tax authorities. This led to the development of a “Soviet culture” mindset. Accountants saw their jobs as following prescribed rules. Accounting is seen by Hofstede as a field in which historically developed practices are more important than laws of nature. It is therefore expected that accounting rules and the way they are applied will vary among different national cultures. Hence, Gray tried to explore how Hofstede's national cultural dimensions may explain international differences in accounting. With respect to past research in this area, Nobes argued that “national accounting traditions are likely to continue into consolidated reporting where scope for this exists within IFRS rules”. Ding et al. investigated the role of a country's culture and legal origin as an explanation for the differences between local Generally Accepted Accounting Principles (GAAP) and IAS as they were in 2001. The study gathered 53 Russian accountants' attitudes towards reporting under harmonised Russian Accounting Standards through semi structured interviews. Findings – The findings supported the theoretical view of a “Soviet culture” which has an impact on harmonisation of Russian Accounting Standards with the IFRS. Russia's high rankings in such cultural dimensions as power distance, uncertainty avoidance and collectivism have contributed to the development of certain preferences among Russian accountants. Those preferences were for statutory control, uniformity, conservatism and secrecy. Further findings indicate that accountants in Russia display reluctance to disclose financial information to the external users. One of the main reasons was found to be fear of disclosing too much information to competitors. Based on these findings, accountants in Russia display clear signs of preference for secrecy as opposed to transparency, as identified by Gray. Originality/value – One of the contributions of this study is to examine current perceptions of Russian accountants towards financial reporting under new harmonised Russian Accounting Standards based on Rozhnova's study.

Journal

Journal of Accounting & Organizational ChangeEmerald Publishing

Published: Mar 15, 2013

Keywords: Culture and accounting; Accounting and politics; Accounting regulation; IFRS; Socio‐cultural analysis of accounting systems; Accounting; Politics

There are no references for this article.