Globalisation is one of the largest developments that civilisation has had to face. The impact on the global economy has been massive and due to this the accounting realm and its procedures have become very important. It is believed that harmonization of an International Accounting Standard will generate more efficient and unified financial markets, superior distribution of resources and a reduction in transaction costs. Although there seems to be significant benefits to implementing an International Accounting Standard, there are many challenges to overcome to develop and sanction these systems. Factors that influence the development process include, Political and legal systems, economic conditions and business activity, standard setting processes, capital markets and ownership, cooperative, supportive and accepting efforts by the nation and social, cultural and religious values.
Social, cultural and religious divergences between nations can be recognised as an important influencing feature on disclosure, standards and reporting behaviour in regards to accounting practises. )ie: Professional v statutory, uniformity v flexibility, conservatism v optimism and secrecy v transparency.) To achieve global accounting standards, various cultural factors, not just individualistic cultures (ie: Western), need to be addressed. Culture is a learned behaviour and is a product of man’s activity (Violet, 1983) and plays a significant role in an individuals, organisations and nations ability to function. Religion is also a significant cultural factor that influences social and national institutions and needs to be understood and accepted if any uniformity is to be established with an International Accounting Standard.
Due to the impacts of religious and cultural norms, can a standardised and international accounting system that is considered a“one-size-fits all” solution realistically be implemented? A nations belief systems is the foundation of the shaping of cultural...