An examination of the influence of national culture on accountants' application of financial reporting rules: A test of Gray's theory.

摘要

The objective of this study is to examine the effect of national culture on accountants' application of accounting rules, with particular emphasis on Gray's (1988) accounting values of conservatism and secrecy. Although Gray's cultural accounting framework is primarily concerned with the effect of culture on a country's financial reporting system, it is posited here to be equally applicable to accountants' financial reporting decisions.; The works of Hofstede (1980) and Gray (1988) were used as guidelines for identifying countries that are most likely to differ on the accounting values of conservatism and secrecy. Accordingly, professional accountants in the U.S. and Greece were selected as subjects in this study to represent low and high conservatism and secrecy countries, respectively.; An experiment was conducted to investigate Greek and U.S. accountants' recognition and disclosure decisions. Based on a modification of Gray's framework, H1 hypothesized that Greek professional accountants would be more likely (less likely) to recognize contingent liabilities (assets) than U.S. accountants. H2 hypothesized that Greek accountants would be less likely to disclose the existence of both contingent assets and liabilities than U.S. accountants.; The results do not support H1. No significant differences were found between Greek and U.S. professional accountants' recognition decisions involving both contingent assets and contingent liabilities. However, supplemental analyses show that U.S. participants consistently exhibited more conservatism than Greek participants. Greek accountants were less likely than U.S. accountants to disclose the existence of both contingent assets and contingent liabilities, providing strong support for H2.; This study has implications for both research and practice. This study represents the first attempt to explicitly test Gray's theoretical framework with respect to the conservatism and secrecy values at the individual level. The lack of support for H1 suggests that culture may not act as an impediment to the application of recognition rules across countries. This is good news for proponents of harmonization. The results in support of H2 suggest that national culture does play a role in accountants' disclosure judgments. Different disclosure judgments could lead to different quality financial reporting, which could result in different levels of information asymmetry between managers and investors.