DEFINITION OF CULTURE AND ITS IMPACT TOWARDS ACCOUNTING

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Many researchers have suggested that culture have been important factor that affect the development of accounting systems in international accounting. Bloom and Naciri (18, page 7) defined culture as the total pattern of human behaviour and its products embodied in thought, speech, action and artifacts and dependent upon man's capacity for learning and transmitting knowledge to succeeding generations through the use of tools, language and systems of abstract thought¡±

They used this definition based on the Websters Third New International Dictionary Unabridged (161). While Belkaoui (14) said that culture plays an important role in the organization of everyday understanding in accounting and implies that accounting knowledge is organized in a culturally standardized format which tells individuals how to react to a particular accounting phenomenon.

Cultures changes in different country have been proven when it is applied in accounting environment. This can be seen clearly in two different countries. According to Pourjalali and Meek (15), they explore the change in cultural values in Iran and found out four changes in cultural variables, which were lower individualism, large power distance, stronger uncertainty avoidance and higher masculinity. While in Spanish case, Blake have found out that the results are quite different from Iran case, which were higher individualism, small power distance and weaker uncertainty avoidance. These results might cause by the move from dictatorship to democracy in Spain. It shows that Spain and Iran have two different cultures that give impact on the accounting environment of respective country.

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As we know, each country has different kind of culture, which makes them to use different kind of accounting systems. That is why we are having problem in differentiating financial statements in those countries. In order to overcome this problem, each country has to use standardized or universal accounting systems. However, this can't be happening because culture have been identified as the most important factors in influencing accounting systems and the process of accounting changes. This is proven in the two case studies that are stated above.

Amat, O., Blake, J., Wraith, P. & Oliveras, E. Dimensions of national culture and the accounting environment ¨C the Spanish case. Journal of Economic Literature.

Verma, S. & Gray, S. The impact of culture on Accounting Development and Change An Exploratory Model.

Verma, S. Culture and Politics in International Accounting An Exploratory Model.

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