Intl Factors Culture

Enterprises Ownership

Enterprise Finance & Activities Cap. Market

Taxation
Accounting Profession

Accounting Systems
Accounting Regulation

Acctg Educ. & Research

Legal System

Inflation

Economic Growth & Development

Social Climate

Political System

External Influences Forces of Nature Trade Investment Conquest Societal Values

Institutional Consequences Legal System Corporate Ownership Capital Markets Professional Associations Education Religion

Ecological Influences Geographic Economic Demographic Genetic/Hygienic Historical Technological Urbanization

Accounting Values

Accounting Systems
Reinforcement

International Forces for Change Economic/Political Interdependence Foreign Direct Investment Multinational Corporate Strategy New Technology International Financial Markets Business and Financial Services International Regulatory Organizations Physical Environment Factors Societal Values Institutional Consequences

Accounting Values

Accounting Systems

Government, Economics

Sweden Law Based Japan Germany Spain, Belgium, France, Italy US, Canada
Ireland, UK, New Zealand, Australia

Macro Uniform

Continental: Government, Tax, Legal

Business Practices, Pragmatic British Origin

Tax Based

US Influence UK Influence

Micro Based

Business, Economic Theory

Netherlands

1.
2. 3. 4. 5. 6.

7.
8. 9.

Type of users of the published accounts of the listed companies Degree to which law or standards prescribe in detail and exclude judgment Importance of tax rules in measurement Conservatism/prudence (e.g., valuation of buildings, stocks, debtors) Strictness of application of historic cost (in the historic cost accounts) Susceptibility to replacement cost adjustments in main or supplementary accounts Consolidation practices Ability to be generous with provisions (as opposed to reserves) and to smooth income Uniformity between companies in application of rules

Societal Values:
Individualism/ Collectivism Power Distance Uncertainty Avoidance Masculinity/Femininity Short/Long term Orientation

Accounting Values:
Professionalism Uniformity/Flexibility Conservatism/Optimism Secrecy/Transparency

Accounting Systems/Practices
Authority and Enforcement Measurement of Assets & Profits Information Disclosure

Reinforcement

Reinforcement

Statutory Control
Less - developed Latin Less - developed Asian African Asian Colonial Near Eastern Japan More developed Latin

Germanic

Flexibility

Uniformity

Nordic

Anglo Saxon

Professionalism

Secrecy
Less-developed Latin Germanic Near Eastern Japan Less-developed Asian More-developed Latin African

Optimism
Asian Colonial Nordic Anglo Saxon

Conservatism

Transparency

Basic
Value

Accounting
Values
Professionalism Statutory Control + + + n/a n/a + Uniformity Flexibility Conservatism Optimism Secrecy Transparency + + + n/a n/a n/a n/a + + n/a n/a n/a n/a + + + n/a n/a + + + + n/a n/a + + + + + + + + + + + + +

Individualism Collectivism

Large Power Distance Small Power Distance + Strong Uncertainty Avoidance Weak Uncertainty Avoidance Masculinity Femininity Short Term Long Term + + + -