Cultural values and financial reporting practices: contemporary tendencies in Eastern European countries

Financial reporting practices may never be uniform because of contextual factors that differentiate countries and businesses all over the world. By following Gray’s (1988) approach, this study investigates how cultural factors influenced financial reporting practices from three representative Easter...

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Bibliographic Details
Published in:Eastern journal of European studies 2018-12, Vol.9 (2), p.89-109
Main Authors: Zahid, R.M. Ammar, Țaran, Alina, SIMGA-MUGAN, F.N. Can
Format: Article
Language:English
Subjects:
Accounting
accounting values
cultural dimensions
Earnings
Eastern Europe
Economy
Financial reporting
Gray’s theory
Socio-Economic Research
structural equations modelling
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Summary:Financial reporting practices may never be uniform because of contextual factors that differentiate countries and businesses all over the world. By following Gray’s (1988) approach, this study investigates how cultural factors influenced financial reporting practices from three representative Eastern-European countries, Lithuania, Poland, and Romania, during the 2000-2015 period. Confirmatory factor analysis and structural equation modelling indicate that societies’ orientation towards uncertainty avoidance and individualism influence accounting values of professionalism, uniformity, conservatism, and secrecy. Masculinity dominance enhances accounting for prudential practices and limited disclosure. These findings suggest that international accounting harmonization cannot overcome cultural boundaries. Standard-setters, practitioners, and stakeholders need to be aware of this.
ISSN:2068-651X
2068-6633