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

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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)

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.

Suggested Citation

  • R.M. Ammar ZAHID & Alina ȚARAN & F.N. Can SIMGA-MUGAN, 2018. "Cultural values and financial reporting practices: contemporary tendencies in Eastern European countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 9, pages 89-109, December.
    • Handle: RePEc:jes:journl:y:2018:v:9:p:89-109
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    Cited by:

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    2. Katsuyoshi Okabe & Martha G. Suez-Sales, 2021. "The Use of the Statement of Cash Flows by Japanese SMEs," Eurasian Journal of Business and Management, Eurasian Publications, vol. 9(4), pages 268-282.
    3. Adriana PADURARU (HORAICU) & Ana-Maria COMANDARU (ANDREI) & Volodea MATEEVICI, 2021. "The Analysis Of Financial And Non-Financial Indicators, Essential Component Of Appreciating The Global Performance," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 6(1), pages 45-56.

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