Japanese Culture Factors Influenced the Disclosure of Financial Information

Topics: Empire of Japan, Meiji period, Japan Pages: 6 (1973 words) Published: August 25, 2010
Topic 4

Japanese culture factors influenced the disclosure of financial information

Japan is an unique oriental country in many aspects, especially in politics and economy, both western practices and traditional nationalism are coexisted in this country. The period 1890-1940 was just followed the Meiji restoration, and was typical in the history of Japan, at that time, Japan was on the way from a feudal country to a capitalistic country, called modernization. Many western practices were being more and more adopted, however, at the same time, traditional rules still had strong influences in Japan. Under this background, this report will discuss the Japanese cultural factors during 1890-1940 that influenced the disclosure of financial information. In 1868, Japanese government began the social and economical reform, called "Meiji Restoration”,which represented that Japanese government decided to guide this oriental country to the way of modernization and westernization, and many conventions in political and economical fields would be modified to comply with new practices. Disclosure of financial information was also influenced by this trend, and being perfected.[1] Foreign accounting culture

Before Meiji period, Japan's accounting was imported from China and adapted to the situation in Japan. It was single entry for accounting, but in Meiji period (1868-1912), there appeared a trend of accelerated modernization of accounting. Moreover, American accounting standards and double entry accounting were translated into Japanese, and most of Japanese enterprises began to use this new method. Though single entry accounting was still being used at that time, undoubtedly, double entry accounting could provide more information disclosure to the public compared with the old method.

Political factors
During the period 1890-1940 of Japan, politics from instability to stability and the modern Japanese political system was built after the Constitution of 1889, which means Japan had became a capitalistic country from the perspective of law. At the same time, political parties grew rapidly and controlled the main power of the government, their leaders and members were mainly from business, politics and military. They helped this country carry out the reform, at the same time, many traditions were also kept. Newly developed enterprises had a demand for profits and development, this voice was being heard through their representatives in the government, therefore, reforms of accounting was also pushed by this force, to some extent. A series of modern institutions were established, Ministry of Finance was the main policy office of the government, it was the agency responsible for financial matters, by 1898 the basis of its present duties and organization had been established, including budgeting taxes banking, insurance stocks and bonds, and international monetary affairs. These institutions paved the way for Japan to become a modern country in most aspects of economy. • Government intervention

Unlike other capitalistic countries, government intervention is obvious and plays an important role in the development of economy though Japan is becoming a democratic country after Meiji restoration. Therefore, the economy of early 20th century Japan has thus rested continuously on the balance between confidence on market power and resort to government intervention, market relationships did not operate in quite the same way in Japan as in the western economies. There were at least two reasons for the speed of Japan's modernization: the employment of over 3,000 foreign experts, in a variety of specialist fields such as teaching English, science, engineering, the army and navy etc.; and the dispatch of many Japanese students overseas to Europe and America, based on the fifth and last article of the Charter Oath of 1868: 'Knowledge shall be sought throughout the world so as to strengthen the foundations of Imperial rule.' This...
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