Workshop Questions - How to Make the Most of Your Workshop

It is unlikely that the USA will adopt IFRS because of hindrances that are difficult to eliminate fully. The high cost of convergence is one of them. At the same time, the USA internal and external business environments are significantly litigious. FASB standards are highly specific and are continuously updated with regard to the changing business environment. This makes adoption of IFRS difficult because of the required significant shift, which is hard to achieve. The USA has not been in the front line of minimizing FASB priorities that limit IFRS and FASB standards' success.

QUESTION 2

The adoption of IFRS by different countries does not translate to the consistency and comparability of accounting procedures and practices. While there will be significant similarities, divergence will be reinforced by the difference in business environments in different countries, differences in business-related policies such as tax-related laws, and political dynamics in different countries. Furthermore, dynamic economic activities that significantly differ from one country to another will directly or indirectly affect judgment and accounting decision making. It is also imperative to note that the IFRS standards' implementation and control are likely to differ from one country to another.

QUESTION 3

The Hofstede–Gray model has it that there exists a strong there should be an overlap between a country's accounting standards and its cultural patterns, especially at the national level. In one of the model's dimensions, Confucian Dynamism, the link between accounting values and societal values is significantly argued out through an assertion that communities concerned with a short term orientation of virtues prefer an absolute truth approach to different undertakings, including accounting in this context. Furthermore, in another dimension termed as strong versus weak uncertainty avoidance, people embrace certain values and a culture that is likely to positively affect organizations in times of uncertainties.

QUESTION 4

Hamid, Craig, and Clarke (1993) argue that cultural aspects, in this context, religion significantly impact business-related undertakings; hence, accounting standards. The authors present a case study of Islam and its effect on accounting. They argue that Islam influences its adherents to adhere to a certain code of ethics, especially in how they behave in terms of commercial undertakings. This, in turn, directly or indirectly affect the structure and mechanics of related accounting policies. With such a strong religious inclination to act in a particular manner, western accounting policies are unlikely to be less acceptable among such demographics.

QUESTION 5:

One of the limitation of the study by Heidhues & Patel (2011) is its narrow nature. It does not take significant consideration of international literature on how culture affects accounting standards. Furthermore, its validity is questionable. For a long time, researchers have accepted the model without critically questioning it, hence, its wide adoption. Closely related to the above, the framework is oversimplified, making the hypothesis weak compared to international frameworks. Here, contextual factors such as politics, social factors, and historical environmental issues that affect different countries have not been considered. 

One of the issues related to the model's questionable validity is that even though empirical tests have been done to know its applicability, such tests are questionable. Another pertinent issue is the choice of concepts that apply to the model, some of which are bias. An example is some that imply less professionalism by European accountants. Furthermore, there is no explanation of how Hofstede's data is used to prove the hypothesis in Gray's model. Due to the presence of significant theoretical and methodological assumptions used as a basis of reaching a conclusion, the model cannot be fully relied on for accounting research.