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

R.M. Ammar Zahid (), Alina Țaran () and F.N. Can Simga-Mugan ()
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R.M. Ammar Zahid: Virtual University of Pakistan
Alina Țaran: Izmir University of Economics, Izmir, Turkey
F.N. Can Simga-Mugan: Izmir University of Economics, Izmir, Turkey

Eastern Journal of European Studies, 2018, vol. 9(2), 89-109

Abstract: 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.

Keywords: accounting values; cultural dimensions; Gray’s theory; Eastern Europe; structural equations modelling (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:jes:journl:y:2018:v:9:p:89-109

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