Title: Cultural effects on accounting practices and investment decisions

Authors: Karen Moustafa Leonard, Michael Slaubaugh, Hwei Cheng Wang

Addresses: Department of Management and Marketing, Doermer School of Business and Management Sciences, Indiana University–Purdue University Fort Wayne, Fort Wayne, IN 46805, USA. ' Department of Accounting and Finance, Doermer School of Business and Management Sciences, Indiana University–Purdue University Fort Wayne, Fort Wayne, IN 46805, USA. ' Department of Accounting, School of Business, Alabama A&M University, 4900 Meridian Street, Normal, AL 35762, USA

Abstract: Due to increasing globalisation, accounting practices and individual investment decisions are no longer constrained by national borders. However, we believe individual practices and decisions are constrained by societal culture due to its impact on the development and setting of national accounting standards, the application of those standards by local businesses to create information and investors| interpretation of information provided by local businesses. We propose a framework to examine these effects and suggest future research directions.

Keywords: societal culture; investment decisions; cross-cultural accounting; international accounting; individualism; collectivism; power distance; universalism; particularism; cultural effects; accounting practices; globalisation; national accounting standards; investors; information interpretation; local businesses; finance.

DOI: 10.1504/IJAF.2010.032086

International Journal of Accounting and Finance, 2010 Vol.2 No.2, pp.156 - 170

Published online: 09 Mar 2010 *

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