Critically evaluate to what extent past research into classification of accounting systems has become irrelevant because of international harmonization efforts.
Let us remind that IASC was replaced in 2001 by IASB (International Accounting Standards Board).
We are going to start this paper with the different classification researches, taking for example Hofstede and Gray’s studies. Then we will draw the main differences between GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards).
We will also speak about the Americanocentrism problem. To finally dealing with the differences and harmonization.
*Two Main Example*s* of Past Studies*: *Hofstede’s* societal dimensions and Gray’s accounting values
Different Classification Researches
The first one is the deductive or judgmental method. Environmental factors are identified and they are linked to national accounting practices. Then, international groupings and development patterns are proposed.
The second one is the inductive or empirical approach where individual practices are analyzed; the grouping or development patterns are identified, and where the explanations are based on economic, social, political and cultural factors proposed.
In the deductive approach, Mueller developed four approaches to accounting development.
Macroeconomic pattern: where business accounting is tied to national economic policies (Sweden, France, Germany)
Microeconomic pattern: where accounting is a branch of business economics (Holand)
Independent discipline pattern: where accounting is a service function derived from business practices (US, UK) and where accounting is considered to be capable of developing its own conceptual framework from business practice.
Uniform Accounting pattern: where accounting is an efficient mean of control and administration.
It takes into account that culture and... [continues]
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