Culture And Accountancy by syukri2204


									In 1980, a commentator named Hofstede defined culture as the collective
programming of the mind that distinguishes the members of one human group
from another. He likened the cultures of the world to the operating
systems that let us use our computers. Computer operating systems contain
sets of rules that act as a point of reference. In this way, culture
includes a set of societal values that drive institutional form and
practice. If this is true, then culture has an impact on how countries
form their legal systems, political systems, capital markets, and other
substructures. If, such as we apply this to Accounting then you can bet
that accountants from Ireland hold different accounting practices and
norms than their accountant counterparts in England, or America.
Sometimes, culture in one country is so diverse that differences in how
accountants practice their profession vary from one region to another. As
accounting is a profession which allows for professional judgment, we can
assume that accountants in Cork behave differently from accountants in,
say, Dublin.

Hofstede then studied over one hundred thousand employees from IBM in 30
countries, which led him to define, for him, four basic dimensions of
culture. The first dimension is individualism vs. collectivism which
addresses the degree of interdependence that a particular society
maintains among its people. The second is large vs. small power distance.
Power distance refers to the extent to which members of a society accept
that power in institutions and organizations distributed unequally. This
dimension of culture according to Hofstede addresses how society handles
inequalities when it occurs among its people. The third dimension is
strong vs. weak uncertainty avoidance which is the degree to which the
members of society feel uncomfortable with uncertainty: how a society
reacts to the fact the future is unknown, and whether it tries to control
the future or lets it happen. The last dimension is masculinity vs.
femininity which measures a society's preference for achievement,
heroism, material success (which are masculine traits) and for
relationships, modesty, caring and quality of life (which are feminine
Researchers have then used these cultural differences to explain
international differences in the behavior of accountants and to some
extent, the nature of the accounting system in their country. For
example, researchers suggest that a country with high uncertainty
avoidance and low individualism will be more likely to show conservative
measurement of income, and may prefer to limit disclosure only to those
closely involved in the business. Researchers have then come up with
other dimensions with which to measure accounting values, such as
professionalism vs. statutory control, uniformity vs. flexibility,
conservatism vs. optimism, and secrecy vs. transparency.

What does this all mean? For accounting firms and accountants, it means
that they can look to accounting practices of other areas if they want to
improve and develop other ways of doing things. For customers, it means
that they can adjust their expectations depending on who they hire and
where they are from. This leads to more options for both ends, which, in
the end, can only be a good thing.
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