The Challenge Of Culture To International Financial Reorting Standards (IFRS) Convergence
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Institute of Interdisciplinary Business Research
Abstract
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In accounting, the importance of culture and its historical roots is now increasingly being recognized.
With increased globalization of world economy, harmonization of international standards has become
the focus of increasing attention among accounting ':academics, researchers mid practitioners. There is
the internationalization of accounting articulating standards by IASB ariel IFAC which ate both
in val vect i'h harmonization consistent; even if the same standards are followed across nations.
Differences in application of stanctarijs will reduce comparability and transparency. This paper
identifies the cultural factor as a possible reason for i"eporting entities applying TFRS in different ways.
lt establishes the accounting values. Itexpoi:mds on how cultural values and accounting values relate to
each other in the development of accb:tmting stai;ldards worlct~wide. It adopts the secondary data
methodology which is hinged on- the >institutional', theory literature. This information sharpens the
ability to describe; analyze and predi'c(the qevelopment of accounting standatds. It finds that national
c;ultures, traditions and practices will be~inc1;easingly .challenged in the years ahead as the pressures for
global convergence increasingly impact accountants and accounting practices. The paper concludes
that since accounting is culturally- determined as such peculiarities of culture should be adequately
provided for convergence. It recommends the Ltndei,'standing of cultural diversities before converging
with international finaneial.reportihg stanclards.
Keywords
HF5601 Accounting