Abstract
This paper aims to highlight the cultural impact of Hofstede (1980) on the degree of compliance with International Financial Reporting Standards (IFRS) in 55 developing countries for the year 2014, based on the method adopted by Elad (2015) in order to identify IFRS Standards. Results show that culture (by means of three components, namely power distance, uncertainty avoidance, and masculinity) does not promote the degree of compliance with IFRS. However, only one significant relationship was found between individualism and the degree of compliance with IFRS Standards. This finding confirms Gray’s (1988) observation that individualism fosters a climate of transparency and professionalism
Highlights
The need to adhere to an international accounting framework has become increasingly important, as the degree of comparability of information in the financial statements continues to rise
This paper aims to highlight the cultural impact of Hofstede (1980) on the degree of compliance with International Financial Reporting Standards (IFRS) in 55 developing countries for the year 2014, based on the method adopted by Elad (2015) in order to identify IFRS Standards
We assumed that power distance has a positive influence on the degree of compliance with IFRS. This variable appears with a negative coefficient, the results show that this variable does not have a statistically significant effect on the degree of compliance with IFRS
Summary
The need to adhere to an international accounting framework has become increasingly important, as the degree of comparability of information in the financial statements continues to rise. Several studies like Eddie (1990), Salter and Niswander (1995), Sudarwan and Fogarty (1996), Gray and Vint (1995), Zarzeski (1996), Wingate (1997), Doupnik and Tsakumis (2004), and Borker (2012) are inspired by the work of Hofstede (1980) and Gray (1988) to explain the influence of culture on accounting values and practices That is why this model will be presented in this part, and this is the model upon which this study is based.
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