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Cultural differences and judgment in financial reporting standards

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  • Drnevich, Dawn
  • Stuebs, Marty

Abstract

This instructional resource provides you with the opportunity to explore how cultural differences can impact financial reporting outcomes through the judgments accountants make when interpreting and applying accounting standards. It is intended to draw your attention and awareness to culture’s impact on financial reporting judgments since financial reporting is becoming increasingly international in scope. The instructional resource begins by discussing financial reporting standards and cultural differences and then moves into presenting three accounting scenarios. The three scenarios (lease classification, contingent liability, and revenue recognition) examine how applying accounting standards requires judgment and how cultural differences can influence accountants’ judgments and the resulting financial reporting outcomes. In each scenario, you have the opportunity to identify and consider how different cultural dimensions could impact cross-cultural financial reporting outcomes. The instructional resource content allows you to consider the challenges in using and applying a uniform set of global accounting standards that require judgment across cultures.

Suggested Citation

  • Drnevich, Dawn & Stuebs, Marty, 2013. "Cultural differences and judgment in financial reporting standards," Journal of Accounting Education, Elsevier, vol. 31(4), pages 461-482.
    • Handle: RePEc:eee:joaced:v:31:y:2013:i:4:p:461-482
    DOI: 10.1016/j.jaccedu.2013.09.009
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    References listed on IDEAS

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    1. George T. Tsakumis, 2007. "The influence of culture on accountants’ application of financial reporting rules," Abacus, Accounting Foundation, University of Sydney, vol. 43(1), pages 27-48, March.
    2. Michael J. C. Wells, 2011. "Framework-based Approach to Teaching Principle-based Accounting Standards," Accounting Education, Taylor & Francis Journals, vol. 20(4), pages 303-316, March.
    3. George J. Benston & Michael Bromwich & Alfred Wagenhofer, 2006. "Principles‐ versus rules‐based accounting standards: the FASB's standard setting strategy," Abacus, Accounting Foundation, University of Sydney, vol. 42(2), pages 165-188, June.
    4. Ball, Ray & Robin, Ashok & Wu, Joanna Shuang, 2003. "Incentives versus standards: properties of accounting income in four East Asian countries," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 235-270, December.
    5. Christopher Hodgdon & Susan B. Hughes & Donna L. Street, 2011. "Framework-based Teaching of IFRS Judgements," Accounting Education, Taylor & Francis Journals, vol. 20(4), pages 415-439, April.
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    Cited by:

    1. Sami El Omari & Mohamed Taieb Hamadi & Wafa Khlif, 2016. "La diversité des sources d'interprétation et d'application des normes comptables internationales ; un frein à la convergence de la pratique," Post-Print hal-01900554, HAL.

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