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Question
Discuss how culture might impact accounting.
Culture influences the underlying assumptions on which an accounting system (a system that measures stored value) is built. The text stresses two cultural dimensions that have been used in research on the impact of culture on accounting, openness (transparency to secrecy) and optimism to conservatism. All of the dimensions covered in Chapter 4 could also be applied to accounting. For example, in a culture that assumes people are basically good, the controls provided will be looser, whereas in a culture that assumes people have to be disciplined and monitored, controls will be tighter. One might wonder what the movement from the prescriptive, rule-based FASB to the broader, more principles-based IASB might indicate.
Answer
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