Task Solutions-Distinctions in the Accounting Practices: AP0516

Running head: Accounting Theories
Accounting Theories
Name of the Student
Name of the University
Author Note
1 Accounting Theories
Answer 1:
It …

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Running head: Accounting Theories
Accounting Theories
Name of the Student
Name of the University
Author Note
1 Accounting Theories
Answer 1:
It is observed that distinct nations would have distinct economic system, tax system,
legal system and such other underlying the features which result in the distinctions in the
accounting practices. International financial reporting standards (IFRS) are just aset of the
accounting rules and thus the manner in which individuals interpret as well as execute is
influenced by certain other factors (De George, Li and Shivakumar 2016). Though the firms
adopt this IFRS, such accounting practices will not be comparable and consistent globally
due to distinctions in the political as well as economic influences on the overall financial
reporting. Moreover, distinctions in the taxation system, alterations made to this international
standards at different national level and distinctions in the execution, monitoring as well as
enforcement also proves that the adoption of such global standards does not guarantee
consistency as well as comparability of the accounting practices at international level.
Answer 2:
It has been observed that IASB generally seeks to develop as well as publish the
accounting standards and work on enhancing as well as standardisation of the accounting
standards and such procedures (La Torre et al. 2018). Nevertheless, it is quite hard to attain a
global uniform set of such accounting standards for several reasons. The factors for attaining
such aim are communication and globalisation as well as international trade. Many of such
nations do not have to build up the overall accounting framework, stock market as well as
accounting standards due to this IFRS adoption. There are also certain factors which work
against attaining this objective namely alterations which have been made to this IFRS
framework at the national level; distinctions in the overall legal framework, tax framework,
education level and so forth; distinctions in the execution, monitoring as well as enforcement.
2 Accounting Theories
Answer 3:
It is seen that EU is made up of various nations which have certain underlying
taxation, financing, religion, and such other distinctions. It has been seen that it completely
depends on the opinion that whether such differences lay down barriers to the standardisation.
IASB would not generally believe that such barriers are important (Samaha and Khlif 2016).
The overall effectiveness of such standardisation procedure depends on other nations also
embracing such move towards a set of the standards. Agreeing with the IASB standards
would be justly useless endeavour in case other nations do not perform the same type of thing.
Moreover, it is not possible to predict whether the adoption of such international standards
produced by IASB will be beneficial to the entire community of EU in true sense (Ebaid
2016) .It has been generally believed that there are various obstacles to the standardization
and thus further that in various communities standardization is also potential destructive.
Since the member states of this EU generally had to account as per the continental European
framework of accounting instead of Anglo-American framework which has been embraced
by this IASB, the overall alterations in the accounting practice was quite important in certain
nations. It has been also observed that the systems of taxation and accounting of various EU
nations to be quite different, only the continued viability of each EU State embracing such
standards released by IASB can be monitored.
Answer 4:
It is seen that it is quite essential to recognise the nation-particular factors which
might act as the constraints in post-convergent time period. The financial reporting system of
the firm is influenced by local environment of the nation and attempts to demonstrate the
institutional, economic, cultural, and professional pressures as well as influences. Thus, while
such forces of the globalisation as well as convergence are generally moving these
accounting practices towards utilisation of the unified regulatory model for the financial
3 Accounting Theories
reporting, single nation contextual factors might still work as the constraints to the overall
consistent execution. Some scholars contended that the adoption of this IFRS would result in
the comparable reporting of finance, and such arguments generally assumes that the factors
like environmental and culture differences among the countries are conveniently overcome.
Answer 5:
There were certain concerns which has been raised about the utilisation of this Gray ’s
model as the theoretical basis for the accounting research. It is quite important to observed
that this model incorporates the simplest and precise description about the overall validity of
the Hofstadter ’s cultural dimension. However, the existing accounting researches were
unsuccessful in recognising the major drawbacks of this Hofstede and this inadequate critical
evaluation crucially restricts the overall validity of this framework. It is seen that the cocept
of culture as per Hofstedes is significantly simplistic and thus fails to consider the crucial
differences within the nation and also ignore the major contextual factors like economic,
political, social and legal influences on this culture. This drawback has been well-identified
in the growing literature body that relates to the validity of this Hofstede ’sdimension and
national diversity in current world of globalisation that identifies the significance of the
conflict as well as power in determining the culture. Also, it should be noted that Hofstede
gathered this data between 1967 and 1973 and many researchers generally assumes that such
outdated conclusion as well adata are yet applicable in this 21 stcentury. Moreover, the static
and deterministic perspective of the culture by Hofstede has been widely rejected in the
cross-cultural research. In spite of significant criticisms, this work of Hofstede has been
utilised extensively in the global accounting as well as accounting research. Thus, some
researchers argued that uncritical application and adoption of this framework gives evidence
of the overgeneralisation of the theoretical on the basis of assumptions of respectability and
scientific legitimacy. In addition to that, this framework not only demonstrates the crucial
4 Accounting Theories
drawbacks as well as failing of this Hofstede ’sdimensions; however its subsequent huge
scale utilisation further encouraged the application of the methodologically and theoretically
questionable techniques in the global accounting research. It has been also observed that this
international accounting research is generally driven by arobust impetus for laying down the
categorisation often without taking into account whether such categorisations offers reliable
insights. This emphasizes on the measurement which also applies to certain other research
like relevance as well as value of such quantitative corporate governance research. It has been
seen that the arguments raised or rather the concerns raised regarding the validity of this
framework is correct since each and every concern raised have been significantly reflecting
the drawback of this framework which can affect the viability of the accounting values.
5 Accounting Theories
De George, E.T., Li, X. and Shivakumar, L., 2016. A review of the IFRS adoption literature.
Review of accounting studies ,21 (3), pp.898-1004.
Ebaid, I.E.S., 2016. International accounting standards and accounting quality in code-law
countries: The case of Egypt. Journal of Financial Regulation and Compliance .
La Torre, M., Sabelfeld, S., Blomkvist, M., Tarquinio, L. and Dumay, J., 2018. Harmonising
non-financial reporting regulation in Europe: Practical forces and projections for future
research. Meditari Accountancy Research .
Samaha, K. and Khlif, H., 2016. Adoption of and compliance with IFRS in developing
countries: A synthesis of theories and directions for future research. Journal of Accounting in
Emerging Economies .


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