The effect of environmental factors on accounting systems: a comparison between South Korea and Australia

Sang Ho Kim () and Yohan An ()

Journal of Accounting, Business and Finance Research, 2023, vol. 17, issue 1, 22-30

Abstract: As globalization of the business environment increases, cross-national accounting differences have been the main focus of international accounting research. Specifically, the relationship between accounting and environmental factors has been the subject of many debates over the last decade. In comparative studies of accounting history, culture and practices, researchers have become increasingly aware of the importance of environmental factors in shaping a country's accounting system. This study explores whether environmental factors influence accounting systems by comparing South Korea and Australia. Although both South Korea and Australia were colonies, they had different cultural backgrounds and different legal/judicial systems. Australia's accounting standards-setting process is based on business practices and is relatively open to public opinion, while Korea's accounting standards tend to be enforced by the government and harmonized to tax law. Many prior studies suggest that environmental factors can be a valuable tool in explaining and understanding differences in the way in which accounting operates in countries with different environments. Based on environmental factors, this study found that cultural factors and institutional structures have a significant influence on the development of accounting systems and cause their differences. This study is expected to provide a systematic framework for differences in the development of accounting systems by analyzing the effects of environmental factors on accounting systems.

Keywords: Accounting system; Culture; Environmental factors; Legal/judicial system. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spi:joabfr:v:17:y:2023:i:1:p:22-30:id:689

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