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  • Topic: Financial statements, International Financial Reporting Standards, Geert Hofstede
  • Pages : 16 (4646 words )
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  • Published : December 9, 2012
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Table of Content

Table of Content
Part A3
1. Introduction3
2. Literature review3
3. Analysis7
3.1 Professionalism7
3.2 Flexibility8
3.3 Optimism9
3.4 Transparency9
4. Conclusion10
Part B12
Part C14
Appendix 1

Part A

1. Introduction

In recent decades, Australia accounting regulatory system becomes increasingly stronger. Corporation law, the professional accounting bodies as well as the Australia Securities and investment commissions (ASIC), as representatives of Australia’s accounting regulatory system, are pretty hefty reforms in Australia. To date, people recognise that the Australia’s accounting regulatory system that applies to companies is an increasingly important factor than before. In 1988, Gray developed four accounting values (that is Professionalism versus statutory control, uniformity versus flexibility, conservatism versus optimism and secrecy versus transparency) deemed to relate to the accounting subcultures (Deegan, 2009). And these four accounting values were based on Hofstede’s societal dimensions. Furthermore, these four accounting values are associated with different countries’ accounting systems. In order to have a better understanding of Australia’s accounting regulatory system for public companies, the Gray’s four accounting values can be used as a facility. This paper will concentrate on the how the accounting regulatory system of Australia reflects Gray’s four accounting values. Furthermore, diversities of views will he presented in the literature review part and comparing and contrasting will be made following in the analysis part.

2. Literature review

The accounting regulatory system of Australia that applies to companies plays a crucial part of the whole accounting regulations. In order to have a better understanding of the accounting regulation system for companies, Gray’s four accounting values can be used as a facility. The purpose of the literature review that follows is to compare and contrast different authors’ views related to how the Australia’s accounting regulatory system reflects the Gray’s four accounting values.

Since the 1960s, there has been an increasing requirement of the force of law in Australia rather than the ‘general accepted rules’. The increasing complexities of business operations as well as the separate ownership controls are the key drivers of accounting regulations (Benmelech and Moskowitz, 2010). According to Davis, Wanna and Weller (1988, pp. 87-90) till 2005, Australia Accounting Standards Boards (AASB), which is under the control of the Financial Reporting Council (FRC), adopted the ‘International Accounting Standards’ (IAS). As Beer and Thomson continually stated, ‘In Australia, accountants should follow the accounting principles from Australia Accounting Standards Board (AASB). And the Australia Accounting Standards Board follows a conceptual framework which involves accounting concepts to evaluate proposed accounting standards’ (2004, p. 73). In addition, the Corporations Act (2001) Commonwealth gives these standards the force of law. And the Australia Securities and Investment Commission (ASIC) enforces compliance. Funnell and Cooper (1998) further state that the Australia Securities Exchange (ASX) adds an additional layer of regulation for publicly listed companies. More than that, the three Australia accounting professional bodies (CPA Australia, NIA, and ICAA) also play crucial parts of Australia’s accounting regulatory systems. Therefore, Australia’s accounting regulatory system, to date, is a well-developed accounting regulation, and it influences and reinforces the Australia’s accounting processes.

With a brief understanding of Australia’s accounting regulatory system that applies to the companies, it is easier to apply to Gray’s (1988) four accounting values that are based on Hofstede’s (1987) social values. According to Hofstede (1983, p. 339), four underlying societal...
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