The Influence of Culture on Accountants' Application of Financial Reporting Rules

22 Pages Posted: 29 Jan 2007

See all articles by George T. Tsakumis

George T. Tsakumis

University of Delaware - Alfred Lerner College of Business and Economics

Abstract

The objective of this study is to examine the influence of national culture on accountants' application of accounting rules. Based on a refinement of Gray's (1988) framework, this study hypothesizes Greek accountants will be more likely (less likely) to recognize contingent liabilities (assets) than U.S. accountants (H1). It also hypothesizes that Greek accountants will be less likely to disclose the existence of both contingent assets and liabilities than U.S. accountants (H2). The results do not support H1. No significant differences are found between Greek and U.S. accountants' recognition decisions involving both contingent assets and liabilities. However, supplemental analyses show that U.S. accountants consistently exhibited more conservatism than Greek accountants. In line with expectations, Greek accountants are less likely to disclose information (i.e., were more secretive) than U.S. accountants, providing strong support for H2. Implications for both research and practice also are discussed.

Suggested Citation

Tsakumis, George T., The Influence of Culture on Accountants' Application of Financial Reporting Rules. Abacus, Vol. 43, No. 1, pp. 27-48, March 2007, Available at SSRN: https://ssrn.com/abstract=959731 or http://dx.doi.org/10.1111/j.1467-6281.2007.00216.x

George T. Tsakumis (Contact Author)

University of Delaware - Alfred Lerner College of Business and Economics ( email )

419 Purnell Hall
Newark, DE 19716
United States

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