The International Accounting Standard Is Restricted By The Environment, Regulation And Culture Of The Country

758 Words Jan 18th, 2016 4 Pages
Next, the process of setting IFRS as the international accounting standard is restricted by the environment, regulation and culture of the country. Depending on its region, every country practices its own culture which eventually build the society’s behaviour. Nobes and Parker (2012, page 29) note that:
“Culture in any country contains the most basic values that an individual may hold. It affects the way that individuals would like their society to be structured and how they interact with its substructure. Accounting may be seen as one of those substructures.”
The writers also refer to Hofstede’s theory (1984. Page 83, 84) in defining and scoring the basic dimensions of culture. There are four basic dimensions of culture which are the individualism versus collectivism, large versus small power distance, strong versus weak uncertainty avoidance and masculinity versus femininity. This paper will focus on the strong versus weak uncertainty avoidance to emphasise the limitation on applying the single framework for every country. Hosftede explains that uncertainty avoidance is the magnitude of uncomfortable feeling of the society’s members when facing the uncertainty and ambiguity situations. The level of uncertainty avoidance will influence the society’s behaviour for the accounting standard. If the society has a strong uncertainty avoidance, the citizens will be intolerant towards deviant people and refuse any suggested ideas. Consequently, the country will give cold…

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