Cultural Relevance of Western Accounting Systems to Developing Countries

Cultural Relevance of Western Accounting Systems to Developing Countries It has been suggested recently that the accounting systems used in developing countries may be irrelevant to their needs because they originate in Western countries with different cultural values. The accounting literature on this point, however, is vague in its assessment of exactly what aspects of Western accounting systems fail to meet the test of relevance. Furthermore, it is not clear whether the differences between the needs of users in various countries are differences in kind or only differences in degree. This article analyses these issues by introducing technical considerations in addition to the behavioural ones usually discussed and by separating out problems of accounting measurement from problems of accounting disclosure. This distinction is used to argue that it is the specific disclosure rules of particular calculations inherent in Western accounting systems rather than the transaction cost database that are most likely to fail to satisfy the needs of users in developing countries. The effect of the importation of the French Unified Accounting System to Lebanon is examined and an amended version of the Hofstede‐Gray cultural accounting framework is used to clarify the concept of cultural relevance. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Abacus Wiley

Cultural Relevance of Western Accounting Systems to Developing Countries

Abacus, Volume 31 (1) – Mar 1, 1995

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Publisher
Wiley
Copyright
Copyright © 1995 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0001-3072
eISSN
1467-6281
DOI
10.1111/j.1467-6281.1995.tb00355.x
Publisher site
See Article on Publisher Site

Abstract

It has been suggested recently that the accounting systems used in developing countries may be irrelevant to their needs because they originate in Western countries with different cultural values. The accounting literature on this point, however, is vague in its assessment of exactly what aspects of Western accounting systems fail to meet the test of relevance. Furthermore, it is not clear whether the differences between the needs of users in various countries are differences in kind or only differences in degree. This article analyses these issues by introducing technical considerations in addition to the behavioural ones usually discussed and by separating out problems of accounting measurement from problems of accounting disclosure. This distinction is used to argue that it is the specific disclosure rules of particular calculations inherent in Western accounting systems rather than the transaction cost database that are most likely to fail to satisfy the needs of users in developing countries. The effect of the importation of the French Unified Accounting System to Lebanon is examined and an amended version of the Hofstede‐Gray cultural accounting framework is used to clarify the concept of cultural relevance.

Journal

AbacusWiley

Published: Mar 1, 1995

References

  • Corporate Social Reporting: Emerging Trends in Accountability and the Social Contract
    Gray, Gray; Owen, Owen; Maunders, Maunders
  • Towards a Theory of Cultural Influence on the Development of Accounting Systems Internationally
    Gray, Gray
  • Religion: A Confounding Cultural Element in the International Harmonization of Accounting
    Hamid, Hamid; Craig, Craig; Clarke, Clarke
  • A Judgemental International Classification of Financial Reporting Practices
    Nobes, Nobes

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