Introduction

The global society within which we survive and interact is one that has developed and evolved to a point of futuristic advancement that would have been unimaginable as less as half a century in the past. This, moreover, is something that is accentuated even more strongly when considering it in light of the fact that we, as individuals, tend to acquire virtually all of our influences from the societal infrastructure overlapping our existence. From the way that we choose our attire to the manner in which we prefer to the converse and from the perspective (s) we have regarding religion to those concerning politics; all of this tends to be immediately influenced by the features and characteristics of the respective societal infrastructure. It would, furthermore, be relevant to here consider that one of the most instrumental purveyors of the collectively prevalent ideological profile within a particular society is the culture (s) that prevails within the society. This is since culture tends to have significant bearings upon the particularly communal set of beliefs and preconceptions within the given society.

The relevance of culture within the industrial sector (s) & subsequently, accounting

When considering this in light of the contemporaneous relevance of the collective organizational sector (s), moreover, this is something that comes through as an especially crucial realization. It would be relevant to here acknowledge that the internal environment within corporations is something that tends to be directly influenced by the socio-cultural and political features of the society within which it exists. It is barely surprising, considering the fundamental significance of the influential reach of culture/society that even banking and accounting practices within various regions seem to vary particularly upon the pretext of the cultural variations existing between them. This issue, moreover, is made especially relevant when considering it in light of the dramatic rate at which globalization is currently occurring. It is, for instance, commonplace for firms to establish tangibly scaled operations [factories, warehouses etc.] within [foreign] countries that they may perceive as being potential customers. This is something that inevitably makes for a scenario within which a number of firms find themselves operating within an external culture/environment that is dominantly out of synch with the respective internal culture/environment. It would be important, before going any further in consideration the obvious organizational contentions that could be caused as a result of inadaptability within the scenario, to consider that the financial trends that firms adhere to is influenced by culture. While firms in one part of the world may ascribe relevance to a particular set of accounting practices, their counterparts from other parts of the world may practice different accounting trends altogether. This, as has been indicated above, is something that tends to vary particularly as a result of cultural differences between the two respective regions of the world. Take into consideration, for instance, that financial analysts in Taiwan tend to rely significantly more on industry related data, government policy and secondary information sources than their counterparts in the US (Moyes, Park, Wang & Williams, 1997).

Methodologies: Accounting practices & relevance of culture as an instrumental factor

In America, for instance, public and private disclosures by management tend to suffice in concern to the data required by analysts. When considering this in light of the fact that particular organizational sector (s) tend to be immediately influenced by the society within which they exist, this indicates, conclusively, that this discrepancy between analytical trends is brought about by particular cultural features and differences (Moyes, Park, Wang & Williams, 1997). It is quite apparent that while these variations in the development stage of the financial industry of each country, they also indicate differing corporate as well as sociological cultures. It would, moreover, be apt to here acknowledge that accounting systems adopted by countries tend to reflect the cultural, professional, and industrial conceptualizations and perspectives of the countries in particular. The influence of culture upon the accounting practices being adhered to within a specific sector, moreover, is further emphasized when considering it in light of the manner in which firms propelled into foreign environments, as a result of globalization, are impacted. Consider, for instance, the fact that as a result of global competition, many Japanese companies are now operating in the United States (Moyes, Park, Wang & Williams, 1997). In this case, however, the result is not quite as would be expected; a study conducted in regard to the accounting trends of such firms yielded that for the most part, they continued to adhere to their own [domestic] accounting practices. It appears that most of the U. S. based Japanese firms are similar to Japanese domestic firms in as much as their use of accounting methods such as target costing and value engineering variable costing. The study also yielded evidence of strategic adaptation (s) to such traditional methods as standard costing and budgeting (Al Chen, Romocki & Zuckerman, 1997). However, that is not to say that operating within a foreign culture didn’t have any impact upon the accounting practices of [the] firms. The exceptionally prevalent utilization of such stratagem as activity-based costing and internal rate of return for evaluating capital investment projects within such firms for instance, is a trend that U.S.-based Japanese affiliates have acquired as a result its prevalence within the US (Al Chen, Romocki & Zuckerman, 1997). While the first example [relating the Taiwan and the US] suggests that different cultures tend to the acquire different forms of practicing industrial/financial analytics, the second one is more in the line of illustrating how culture yields the capability of influencing change.

Methodologies & data espousing the relevance of culture upon accounting practices

Culture, it must be considered, is especially relevant in consideration the developing the overall attitudinal and behavioral traits of the people belonging to it. This, moreover, is something that is made quite clear when considering it in light of the dramatically different perspectives that cultures from the East and the West respectively hold towards such things as the percentage of ones body that should be covered by garments in order to maintain decency. While this obviously doesn’t have anything to do with accounting, it is basically as a result of such differences that larger, far more significant differences spring forth, such as those within the managerial/organizational sector (s). A relevant factor that comes to mind when speaking of the East and the West, for instance, is that of a study espousing the behaviors and attitudes of Chinese and Western managers in concern to budgetary participation to be as a result of cultural difference (s). While culture, and consequently the corporate culture in China, for instance is prevalently given to high-collectivist, large-power distance, and long-term orientation organizational culture, this is not so within the US. Indeed, the situation appears to be an absolute opposite within the latter country and culture. Take into account that American managers are typically given to represent a culture that is low-collectivist, small-power distance, and short-term orientation (Tsui, 2001). It would be noteworthy to here consider that the study (Tsui, 2001) depended exclusively upon Caucasian expatriate subunit managers in Hong Kong for their analysis of the features, characteristics and impact (s) of western culture. It is apparent, thus speaking, that this made for a line of research similar to that conducted by Moyes, Park, Wang and Williams in 1997. While the 1997 study concentrated on Japanese corporate culture and its fate in the US; Tsui’s study, in 2000, researched the situation vice versa in as much as studying the fate of US organizations, managers and accounting trends in China, Hong Kong to be precise. The conclusion of the second, more recent study, however, wasn’t all that dissimilar from its predecessor; Tsui’s study conclusively indicated that the management accounting theories developed in the context of Western economies may not be generalized to the Chinese environment (Tsui, 2001). The methodology applied by Tsui operated along the lines of offering the respective managers questionnaires tailored to measure the availability of broad scope and timely management accounting systems (MAS), budgetary participation, and their managerial performance. The most relevant indicator of the impact of culture was that the relationship between MAS information and managerial performance of Chinese managers was negative for high levels of participation but positive for Caucasian managers (Tsui, 2001).

Addressing the fundamentals in concern to culture & accounting practices

It would be useful to consider another study based on a similar purpose. This study leaned towards illustrating the relevance of cultural norms in concern to influencing accounting practices in as much as investigating judgments made by accountants in France, Germany, and the United States. Each of the accountants was presented with the same economic facts that are governed by similar financial reporting rules. The relevance of culture as an important vehicle for influencing accounting practices was made conclusively clear. The study yielded that judgments among the three nations’ accountants significantly varied from each other in spite of the fact that each of them had been given similar facts and rules (Schultz & Lopez, 2001). This is something that reasserts the significance of the role of culture in as much as it being relational to what findings may be accepted or unaccepted as being general. While the cultural chasms that have been addressed thus far have been of a rather significant sort would be important to consider that even exceptionally small cultural gaps tend to pose significant issues concerning accounting practices. Take into consideration, for instance, the scenario that comes forth when considering the respective situations in the US, UK and Canada. It is quite apparent that, while the cultural differences between America Taiwan and China are rather overbearing, those between the US, UK and Canada would be comparatively considered insignificant. In spite of this, however, a study that compared the accounting practices of the three regions and cultures indicated that even apparently small cultural differences such as that between the USA and Canada tend to bring forth significant issues. The problem tends to be particularly troublesome since it is widely assumed that small differences do no matter, when, in fact, they do (Salter & Sharp, 2001). It is of utmost essentiality to consider that national identity, which is one of the most influentially forthright vehicles of culture, tends to have an immediate impact upon accounting trends.