The Impact of National Cultures on Accounting Differences and Classification

Assess to what extent differing national cultures are relevant to an understanding of the reasons for accounting differences, and therefore to the process of classification of countries.

12/11/2008

ABSTRACT
Culture was broadly ignored and was flooded in the concept of environmental factors influencing the accounting changes. However, research has shown that culture had a huge role in accounting development and changes. In this essay, we are going to develop Gray’s theory about the relationship between culture and accounting. This essay is mainly based on Gray’s theory as Gray was one of the first authors to explore the culture’s way to explain the changes in accounting. Prior to that demonstration we will define the concept of culture as it is seen by Geert Hofstede, as we judged that his definition of the concept of culture was the most acceptable in our analysis. Finally, we will show some exception to the Gray’s framework to criticize the real influence of culture on accounting systems.
Assess to what extent differing national cultures are relevant to an understanding of the reasons for accounting differences, and therefore to the process of classification of countries?

I. A definition of “culture” is important to assess its influence on accounting differences. a. Culture definition based on Hostede’s work.
As there are as definitions of culture as there are authors who have worked on this topic, we chose along this essay to deal with Hofstede’s definition of culture. Thus Hofstede (1980, page 25) defines culture in that way: “the collective programming of the mind which distinguishes the members of one group to another”.

Culture is collective because it is shared at least by all the people from the same social environment and derives from it, that’s why culture is “learned” and not inherited.

In its Onion diagram (Hofstede, 1994, figure1.2, page 9), Hofstede differentiates the manifestations, shared by a group of people, of cultural differences.
[pic]
These manifestations are defined as symbols, heroes, rituals and values (from the most superficial to the deepest level of culture). In this essay, we will only focus on values, the core of culture. As they are learned from childhood in an implicit way, children are not expressively aware of these values, for instance concepts of right vs. wrong, irrational vs. rational, ugly vs. beautiful are part of their cultural values. According to Hofstede, cultural values have an effect on social systems and on institutions in every country and describe its theory in the following diagram.

(Hofstede, 1980, figure 1.4, page 22)
[pic]

This model underlines that the societal norms (cultural values), influenced by ecological factors, influence themselves the institutions, which, in return, support the societal norms: it is a cycle where both institutions and societal norms support each other.

b. The dimensions of national cultures defined by Hofstede.
To identify these dimensions, Geert Hofstede (1987) submitted a survey to 53 subsidiaries of a big multinational (I.B.M) in order to study the interactions between the corporate culture, more current, and the more specific national cultures, dependent on longer past.
This study of Hofstede aimed at demonstrating that the corporate culture could not be the same in all the subsidiaries because it removed by no means the national culture; in the best case, it juxtaposed to it. And most of the time, it was rather the national culture which remodelled, at least partially, the corporate culture.
The IBM survey, mentioned previously, produced a total of 116 000 questionnaires. Based on the respondents’ answers in the questionnaires, Hofstede first revealed 4 dimensions (later an extra dimension was added in order to deal with Asian countries: short term vs. long-term orientation) illustrating basic problems that human culture has to deal with. The dimensions are the following: power distance, uncertainty avoidance, individualism/collectivism, and masculinity/femininity. Hofstede managed to calculate index scores for the value dimensions for each country, thus making it possible to compare the scores of the individual cultures and allowing classifying the countries.

Let’s now describe these four dimensions model of national cultures: ➢ Power distance: the extent to which people accept unequal distribution of power
| |Low |High |
|Traits |Delegation |Autocratic |
| |Informal |Formal |
| |Independence |Paternalistic |
| |Flat, decentralized structures |Tall, centralized structures |
|Examples |USA, other Anglo countries, Germany, Scandinavia, |France, Belgium, Latin Europe, Latin and South America, Japan|
| |Netherlands |and most of Asia |

➢ Uncertainty avoidance: the degree to which people avoid taking risks or feel threatened by ambiguous situations
| |Low |High |
|Traits |Informal |Formal |
| |Take risks |Reliance on rules |
| |Rely on initiative |Group consensus decisions |
| |Accept dissent |Less tolerant of dissent |
| |Less stressed |More anxious/stressed |
|Examples |USA and Anglo countries, Scandinavia, Singapore, |France, Latin Europe and America, Japan, Germanic |
| |Netherlands |countries |

➢ Individualism/collectivism: the extent to which people focus on themselves as individuals or as members of a group
| |Individualist |Collectivist |
|Traits |People look out for themselves and immediate family |People belong to groups and look after each other in|
| | |exchange for loyalty |
| |Financial security |Group decision making and affiliation |
| | |Individual praise is embarrassing |
| |Individual achievement and recognition | |
|Examples |USA and Anglo countries, France, Italy, Belgium, Scandinavia,|Japan and Asia, Latin America, Africa, except South |
| |NL, Israel, Germany, Austria |Africa. |

➢ Masculinity/femininity: the degree to which people emphasize assertiveness and acquisition of things over caring for people
| |Masculine |Feminine |
|Traits |Results, challenge, achievement career orientation: “live to |Quality of life: “work to live” |
| |work” |Relational, caring for others |
| |Material success, money, things |Cooperation |
| |Recognition, advancement |Employment security |
| |Competitive work environment |Friendly work environment |
|Examples |USA, Anglo countries, Mexico, Columbia, Argentina, Japan, |France, Netherlands, Scandinavia, Brazil, Chile, |
| |German-speaking, Greece |Peru, Israel, Portugal |

II. Gray’s contribution on an understanding of the impact of differing national cultures on accounting changes.
Based on Hofstede’s preliminary work, Gray (1988) defined culture as “the value system shared by major groups of populations” and dealt, for the first time, with the link between accounting and culture. An extension of Hofstede’s model could question that “if societal value orientations are related to the development of accounting systems at the subcultural level, given that such cultural values permeate a nation’s social system, then it may be hypothesized that there should be a close match between culture areas and patterns of accounting systems internationally” (Gray, 1988, page 5). Below, the diagram drawn up by Gray to identify and assess the links between accounting and culture:
(Gray, 1988, diagram 2, page 7)
[pic]

Gray, here, applies directly to accounting the model drawn by Hofstede which concerned management in general. What we can see from this model is that the origins of societal values are the same as in Hofstede’s model, that is to say ecological factors. However, unlike Hofstede’s model, Gray says here that societal values permeate accounting values and institutions to change the accounting systems. It is shown that societal values have an effect on accounting values and accounting systems and tend to influence institutions changes by this way. Like a cycle, once developed institutions support/influence accounting systems, accounting values and origins.

Based on Hofstede’s identification and definition of societal values, Gray (1988, page 8) identified then four accounting values at the subcultural level of accounting practices:

a. Professionalism vs. statutory control: “a preference for the exercise of individual professional judgement and the maintenance of professional self-regulation as opposed to compliance with prescriptive legal requirements and statutory control”. (Gray, 1988, page 8)
Why is it relevant to choose professionalism as an accounting value?
Gray (1988, page 8) argued that because accountants are thought independent to exercise their professional judgement on disclosure throughout the world, then professionalism is a significant accounting value. The facts show that this judgement can change from on country to another, for example, the concept of “true and fair view” required to all the British accountants is based on their own subjective judgement as independent accountants. According to the legal framework, accountants make their own judgement to disclose financial information of what they judge necessary or useful to disclose. We are here talking about professionalism.
The situation is different in a country such as France where specific requirements are asked by legal or statutory institutions for the disclosure of financial information (statutory control).
The difference explained here is: does accounting need a regulatory entity which control the information’s disclosure (statutory control) or do we have to let to the appreciation of accountants the right to disclose the financial information without any requirements (professionalism)?
According to Gray, professionalism is a main accounting value as it requires a professional judgement from the accountants disclosing the financial information.

What is the link between this value and the 4 dimensions value defined by Hofstede?
Gray (1988, page 9) argued that professionalism can be linked most closely with the individualism and uncertainty avoidance dimensions.

|Professionalism |
| |
|Emphasis on independence |
|Belief in individual decisions |
|Respect for individual endeavour |
|Practice is important |
|Belief in fair play |
|Importance of practice |
|Trust |
|Equal rights |
|Justification of laws and codes |
| |
|Individualism |
|Weak uncertainty avoidance |
|Weak power distance |

From this analysis, Gray hypothesized that: countries with a high index score in individualism and a low score on power distance and uncertainty avoidance are more likely to have a high score in professionalism.

b. Uniformity vs. flexibility: “a preference for the enforcement of uniform accounting practices between companies and for the consistent use of such practices over time as opposed to flexibility in accordance with the perceived circumstances of individual companies”. (Gray, 1988, page 8)
Why is it relevant to choose uniformity as an accounting value?
In Gray’s definition (1988, page 9) of uniformity we have to distinguish two elements: - uniformity of rules application - consistency in accounting practices
These two elements would allow a certain degree of comparability between firms.
These three values are intrinsic to the feature of accounting principles.
In France, for example, national planning was allowed by the settlement of a uniform accounting plan whereas in UK or USA, flexibility has a hugest part in accounting as it allows the choice of the set of accounting principles to be compared.

What is the link between this value and the 4 dimensions value defined by Hofstede?
Gray (1988, page 9) argued that uniformity can be linked most closely with the uncertainty avoidance and individualism dimensions.
|Uniformity |
| |
|Concern for law and order |
|Rigid code of behaviour |
|Written rules and regulation |
|Respect for conformity |
|Search of the truth and values |
|Belief in organization and order |
|Respect for group norms |
|Imposition of laws and codes of a uniform character |
| |
|Collectivism |
|Strong uncertainty avoidance |
|Strong power distance |

From this analysis, Gray hypothesized that: countries with a high index score in uncertainty avoidance and power distance and a low score on individualism are more likely to have a high score in uniformity.

c. Conservatism vs. optimism: “a preference for a cautious approach to measurement so as to cope with the uncertainty of future events as opposed to a more optimistic, laissez-faire, risk-taking approach”. (Gray, 1988, page 8)
Why is it relevant to choose conservatism as an accounting value?
To argue his point, Gray (1988, page 10) relies on Sterling’s argument (1967, page 110) defining conservatism as “the most ancient and probably the most pervasive principle of accounting valuation”.
Conservatism can be defined as the prudence in asset measurement. And as the principle of prudence varies across the countries, so does the conservatism value: whereas Western European adopts a conservative style, USA and UK appear to be more optimists In most of the cases, influence of tax laws, capital markets and pressure of users interests could explain the difference between these two blocks according to Gray.

What is the link between this value and the 4 dimensions value defined by Hofstede?
Gray (1988, page 10) argued that conservatism can be linked most closely with the uncertainty avoidance dimension.
|Conservatism |
| |
|Concern for security |
|Need to adopt a cautious approach to cope with the uncertainty of |
|future events |
| |
|Strong uncertainty avoidance |

From this analysis, Gray hypothesized that: countries with a high index score in uncertainty avoidance and a low score on individualism and masculinity are more likely to have a high score in conservatism.

d. Secrecy vs. transparency: “a preference for confidentiality and the restriction of disclosure of information about the business only to those who are closely involved with its management and financing as opposed to a more transparent, open and publicly accountable approach”. (Gray, 1988, page 8)
Why is it relevant to choose secrecy as an accounting value?
A cautious approach on corporate financial dimension defines well the value of secrecy, which is in that way close to the definition of conservatism. Only the area to which they apply can differentiate them as secrecy applies to information disclosure and conservatism applies on measurement (Gray, 1988, page 11).
Once again, this value varies according the countries concerned.

What is the link between this value and the 4 dimensions value defined by Hofstede?
Gray (1988, page 11) argued that secrecy can be linked most closely with the uncertainty avoidance, power distance and individualism dimension.
|Secrecy |
| |
|Need to restrict information disclosures to avoid conflict and |
|competition and to preserve security |
|Need to adopt a cautious approach to cope with the uncertainty of |
|future events |
|Restriction of information in order to preserve power inequalities|
|Closely involved with the firm rather than with external parties |
| |
|Strong uncertainty avoidance |
|Strong power distance |
|Collectivism / Femininity |

From this analysis, Gray hypothesized that: countries with a high index score in uncertainty avoidance and power distance and a low score on individualism and masculinity are more likely to have a high score in conservatism.

To sum up, the matrix below shows the relationship of accounting values with societal values:
[pic]
Source: Gray et al, International accounting and multinational companies, fifth edition, page 49

Aware of the hypotheses formulated by Gray, we can now link societal valued to accounting systems via accounting values, as the table below shows:

[pic]
Source: Gray et al, International accounting and multinational companies, fifth edition, page 50

Gray (1988) identified Uncertainty avoidance and Individualism cultural dimensions as having the most influence on accounting values.
Then, from the statistical analysis based on each country’s index score on cultural values developed by Hofstede, Gray managed to link the cultural values and the accounting values of each country in order to classify them and Gray divided his classification into two areas of relevancy: - authority and enforcement
[pic]

- Measurement and disclosure
[pic]
It is now showed that national cultures have and influence on the process of classification of countries.

However, limiting our essay to the Gray’s theory would be a mistake, because as I said it is a theory and Gray defined this theory without any empirical work, as being the first step for the recognition of culture as an important factor influencing accounting practices and therefore classification of countries.

III. The case of Japanese and Chinese accounting systems: example and counterexample. a. The Japanese shame culture.
Before explaining how shame culture has influenced Japanese accounting changes, we have to define the concept of shame. Thus, Benedict (1967, page 157) defines shame as “a reaction to other people’s criticism. A man is shamed either by being openly ridiculed or rejected or by fantasying to himself that he has been made ridiculous. In either case, it is a potent sanction. But it requires an audience or at least a man’s fantasy for an audience. Guilt does not”. Seppuku or Hara Kiri is an ideology strongly fixed in the Japanese culture. This definition, associated with Hofstede’s definition (1980) of culture as “the collective programming of the mind which distinguishes the members of one human group from another”, will help clearly to understand the influence of culture on accounting changes.

➢ Japan’s openness from 1868: a will to catch up Western countries.
Before 1868, Japan was an isolated, feudal and archaic country and was characterized by an inferiority complex regarding the powerful Western countries.
It is obvious that shame culture has lead Japan to open itself to the outside world.
This culture led Japan to train its accountants by Western countries in order to set up a double-entry bookkeeping. Based on the application of double entry bookkeeping, Zaibatsu, powerful conglomerates, were developed and were able to compete with Western countries.
The Japanese shame culture is also seen in the refusal of a Civil Code in 1878 which was highly inspired from the French one, the reason is simple: among the concept of shame, the Japanese Civil Code couldn’t be inspired from a single country.
The Japanese Commercial Code is another evidence of the effect of culture on accounting systems. Indeed, firstly developed by Hermann Roesler, the Commercial Code was adapted by Japanese jurists in order to demonstrate that the country had the “ability to absorb Western ideas and apply them to different environmental conditions” (Cooke, page 258).

➢ The post-war period
After the World War II, Japan was under the occupation of the USA. And that’s during this period when Japan knew its biggest and deepest changes: the USA implemented new regulatory systems, modifying largely the former Commercial Code, in introducing the Security Exchange Commission in 1948, the Security and Exchange Law in 1949, the Japanese Institute of Certified Public Accountants in 1949, the Investigation Committee on Business Accounting Systems in 1949 and the Tax Bureau and National Tax Administration Agency in 1950.
The reason that could explain the acceptance of such imposed US influence could reside in the Japanese shame culture. Indeed, still according to its inferiority complex, after the WWII defeat, Japan must have thought that it had a lot to learn from its adversary (Cooke, page 260).
Shame culture had also led to the introduction of the Certified Public Accountants Law in 1948 as there was a feeling that Japanese accountants were not as competent as the UK or US accountants were. At that time, the Japanese Institute of Certified Public Accountants stated (1987: 1): “the CAPL was designed to ensure the quality of professional accountants at a level of competence comparable with the United States, the United Kingdom, etc. As a result, the Law requires that Japanese accountants be as comparable in status with Japanese lawyers.” (Cooke, page 263).
Finally, shame culture was an “important factor in the development of consolidated accounts in Japan” (Cooke, page 269). Indeed, Japan felt ashamed when US denied the entrance of Japanese corporation on the New York Stock Exchange for the reason that the accounts only concerned the parent company. McKinnon and Harrison (1986) pointed out that “the Ministry of Finance came to perceive that Japan’s parent-only financial statements carried relatively low international status”, accenting the feeling of shame.
Then, from this US pressure on segment financial information disclosure, the Business Accounting Deliberation Council required the disclosure of “operating profit and sales for each business segment and turnover for each geographical segment” (Cooke, page 270).

However, this last remark raise a conflict between two Japanese cultural values which are shame and secrecy. While shame encourages disclosure of financial information, secrecy, which is also an important accounting value, discourages the disclosure of financial statements. Thus Japan faces a conflict between transparency, brought by shame, and secrecy, a natural Japanese accounting value.

We can then conclude in this case that not only national cultures influence accounting systems, but also international pressures or foreign cultures.

b. Is there a cultural influence on China’s accounting system?
Yes, if we look at Zhang (1992, page 2) suggestion that “Chinese accounting strongly depends upon its culture”. Zhang determined two kinds of culture present in China that he classified:
|Chinese traditional culture |Chinese Modern Culture |
|Influenced by: |Influenced by: |
|Confucianism |Socialism |
|Buddhism |Marxism |
|Defined by: |Defined by: |
|Theory of opposition of Yi (justice) and Li (profit) |The State Theory |
|Opposition of Trusts and Contracts |The Class Theory |
|Dogmatic attitude |Marxism |
|Conservative thought |Cultural Revolution |
|Collectivism | |
|Religions | |

He also determined the relationship between culture and accounting among three ways: - accounting language originates from a social language - accounting reflects social customs - accounting is institutionalized by a national culture
And Zhang concluded that “the difference between China’s accounting and western accounting is because of the tremendous differences of culture between the two”.

However, some criticisms, led by Nobes and Belkaoui, brought a new view on Zhang’s arguments. Indeed, China in 1992 set up a new accounting system broadly inspired by the International Accounting Board, in a context of harmonization, it is hard to believe that accounting language, supposed to be international, finds its roots in the social language. How the international accounting language could be inspired by one national culture?
Moreover, the relevancy of culture as being a factor influencing the accounting systems could be questionable. Indeed, the different changes occurred within the accounting systems stem more from economic factor than cultural factor: - the uniform accounting system (1952) is the result of a new social, political and economical system (creation of the People Republic of China in 1949) - the creation of the Accounting Standards for Business Enterprises in 1992 is the result of a new economical tendency (globalization and social market economy)

Van Hoepen (1995, page 349), as a conclusion, suggested that “culture influences on accounting diminished in China in the three period after 1949, while economic influences gained importance.”

As a conclusion, concerning the Chinese case, we can question the real impact of national culture on the accounting system changes. Indeed, China has set up an accounting system inspired broadly from IAS and based on self-regulation, professionalism (individual judgements), flexibility (accounting standards) and transparency.
This is in total rupture with the accounting values based on China’s societal values which are: statutory control, uniformity, conservatism and secrecy.
In such case, we cannot assert the relevancy of culture as having an impact on accounting systems changes and therefore on classification.

CONCLUSION
If it is obvious that the relevancy of culture as having an impact on accounting systems changes and therefore on classification in Western countries has been clearly assessed, we have see in the last two examples, concerning Asian countries, that this assertion is less relevant. Gray has based his theory on Hofstede’s work; however Hofstede’s work has shown some limits. Indeed, Hofstede and Gray’s framework is based on a study of western countries with a similar curve of development and economic growth and similar political systems. Thus applying this framework to China or Japan is not accurate. And Neimark and Tinker (1986) to add that “accounting and culture interact dynamically, static generalisations are dangerous for forecasting and designing control systems”.
McKinnon and Harrison (1999) criticized Gray’s framework and Hofstede theory by identifying four weaknesses: - culture cannot be entirely assessed - index scores don’t take into account the differential if intensity between cultural values across the countries, then the comparable basis would be distorted - culture cannot be summed up by words - culture is not the main factor considering the accounting changes.
Gray (1988), himself, suggests considering the international pressures as being a factor influencing the accounting changes.
REFERENCES

Belkaoui Ahmed, 1978. “linguistic Relativity in Accounting”, Accounting Organization and Society, October, P97-104.
Benedict, R. 1967. The Chrysanthemum and the Sword, London: Routlegde & Keagan Paul.
Cooke, T. E. "The Evolution of Financial Reporting in Japan: A Shame Culture Perspective." Accounting, Business and Financial History. Autumn 1991.
Gray, S. J. 1988. “Towards a Theory of Cultural Influence on the Development of Accounting Systems Internationally.” Abacus (March): 1†15.
Harrison, G. L., and J. L. McKinnon. 1986. “Culture and Accounting Change: A New Perspective on Corporate Reporting Regulation and Accounting Policy Formulation.” Accounting, Organisations and Society 11(3): 233†252.
Harrison, G.L and McKinnon, J. L, 1999, Cross-cultural research in management control systems design: a review of the current state, Accounting, Organizations and Society, 24, 483-506.
Hofstede, Geert. 1980. Culture’s Consequences: International Differences in Work-Related Values. Beverly Hills, CA: Sage.
Hofstede, Geert, and Michael H. Bond. 1988. “The Confucius Connection: From Cultural Roots to Economic Growth.” Organizational Dynamics 16(4): 5†21.
Hofstede, Geert, Culture and Organisations: Software of the Mind, (Great Britain, McGraw Hill, 1994)
Japanese Institute of Certified Public Accountants (JICPA). 1987. Corporate disclosure in Japan: Overview, Tokyo: JICPA
McKinnon, J. L. 1986. The Historical Development and Operational Form of Corporate Reporting Regulation in Japan. New York: Garland.
Neimark, M. and T. Tinker. 1986. The social construction of management control systems. Accounting, Organizations and Society 11(4-5): 369-395.
Nobes, C. W. 1998. “Towards a General Model of the Reasons for International Differences in Financial Reporting.” Abacus (September): 162†187.
Radebaugh L.H. and Gray S.J., International Accounting and Multinational Enterprises, 5th ed, (United States, Wiley, 2002)
Sterling, Robert R. 1967. “Conservatism: The Fundamental Principle of Valuation in Traditional Accounting.” Abacus (December): 109†132.
Van Hoepen, 1995. “Accounting in China: a case of vanishing cultural influence”, Perspectives on Accounting and Finance in China, Routledge, London, P366.
Zhang Tianxi, Gao Shansheng and M.A. van Hoepen, 1992. “Accounting and culture: The Chinese case study”, Report 9202/ACC, Erasmus University Rotterdam, P3.

[pic]
-----------------------
Outside Influences

Forces of nature Forces of man Trade, conquest Scientific discovery

Origins

Ecological factors Geographic Economic Demographic Genetic/hygienic Historical Technological Urbanization

Societal norms

Value systems of major groups of population

Consequences

Structure functioning of institutions Family patterns Role differentiation Socialization emphases Education Religion Political Structure Legislation Architecture Theory development

Reinforcement

External Influences

Forces of nature Trade Investment Conquest

Origins

Ecological factors Geographic Economic Demographic Genetic/hygienic Historical Technological Urbanization

Societal values

Institutional consequences

Legal system Corporate ownership Capital markets Professional associations Education Religion

Reinforcement

Accounting values

Accounting systems

Uncertainty avoidance
Masculinity/femininity

Power distance

Individualism/collectivism

Societal values

Secrecy / transparency

Conservatism / optimism

Professionalism
Uniformity / flexibility

Accounting values

Information disclosure

Measurement of assets and profits

Authority and enforcement

Accounting systems / practices

Reinforcement

Reinforcement

References: Belkaoui Ahmed, 1978. “linguistic Relativity in Accounting”, Accounting Organization and Society, October, P97-104. Benedict, R. 1967. The Chrysanthemum and the Sword, London: Routlegde & Keagan Paul. Gray, S. J. 1988. “Towards a Theory of Cultural Influence on the Development of Accounting Systems Internationally.” Abacus (March): 1†15. Harrison, G. L., and J. L. McKinnon. 1986. “Culture and Accounting Change: A New Perspective on Corporate Reporting Regulation and Accounting Policy Formulation.” Accounting, Organisations and Society 11(3): 233†252. Harrison, G.L and McKinnon, J. L, 1999, Cross-cultural research in management control systems design: a review of the current state, Accounting, Organizations and Society, 24, 483-506. Hofstede, Geert. 1980. Culture’s Consequences: International Differences in Work-Related Values. Beverly Hills, CA: Sage. Hofstede, Geert, and Michael H. Bond. 1988. “The Confucius Connection: From Cultural Roots to Economic Growth.” Organizational Dynamics 16(4): 5†21. Hofstede, Geert, Culture and Organisations: Software of the Mind, (Great Britain, McGraw Hill, 1994) Japanese Institute of Certified Public Accountants (JICPA) McKinnon, J. L. 1986. The Historical Development and Operational Form of Corporate Reporting Regulation in Japan. New York: Garland. Neimark, M. and T. Tinker. 1986. The social construction of management control systems. Accounting, Organizations and Society 11(4-5): 369-395. Nobes, C. W. 1998. “Towards a General Model of the Reasons for International Differences in Financial Reporting.” Abacus (September): 162†187. Radebaugh L.H. and Gray S.J., International Accounting and Multinational Enterprises, 5th ed, (United States, Wiley, 2002) Sterling, Robert R Van Hoepen, 1995. “Accounting in China: a case of vanishing cultural influence”, Perspectives on Accounting and Finance in China, Routledge, London, P366. Zhang Tianxi, Gao Shansheng and M.A. van Hoepen, 1992. “Accounting and culture: The Chinese case study”, Report 9202/ACC, Erasmus University Rotterdam, P3.