A Re-examination of Gray's Culture Framework Using a Modification of Nair's Accounting Practice Classification: Is There a Relationship with IAS Conformity?

Abstract

The harmonization of international accounting practices is a complex, slow process that involves multiple issues. According to the literature, little empirical research has assessed the extent to which harmonization via International Accounting Standards (IAS) is actually occurring and the research that has been conducted to date have reported mixed results. This proposed research will explore the extent that culture, defined within Gray's (1988) adaptation of Hofstede's (1983) cultural dimensions to accounting values, may explain and predict degrees of a country's conformity with IAS. This exploratory study proposes to first determine if a relationship exists between the Hofstede/Gray cultural dimensions framework and a modification of Nair's classification of accounting practices. For those countries for which a relationship exists between cultural dimensions and accounting practices, the study will then examine what relationship exists between these countries' accounting practices (i.e., financial measurement and disclosure) and the degree of conformity with IAS.