Factors affecting judgments of professional accountants: a comparative study of Australia and Fiji

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Abstract

This study extends prior cross-cultural research by examining the effects of both cultural and non-cultural variables on judgments of professional accountants. By including a wider spectrum of variables than has been considered individually by prior researchers, the study may provide a better explanation of the factors causing differences in the judgments of professional accountants. It examines the extent and the cause of differences in judgments between professional accountants in Australia and Fiji when interpreting and applying selected International Financial Reporting Standards (IFRSs) which contain uncertainty expressions. It is expected that the level of conservatism shared by accountants in a country will affect their interpretation of uncertainty expressions used to establish the threshold for recognition of various accounting elements. The results obtained on the cultural dimensions of Uncertainty Avoidance, Individualism, Masculinity and Long-term Orientation provided conclusive evidence that Fijian accountants exhibit stronger conservatism when compared to Australian accountants. This study provides empirical evidence to support the view that national culture has a significant effect on the manner in which professional accountants in a country interpret uncertainty expressions contained in the IFRSs. The results also provide strong support for the argument that national culture and organizational culture (big 4 and non–big 4 firm affiliation) interact to influence the judgments of professional accountants. Additional analyses carried out to identify the effects of other non–cultural factors on judgments of professional accountants in Australia and Fiji show that both the professional accountant’s level of familiarity with IFRSs and their perceived level of complexity in each of the three scenarios used in this study have a significant effect on their judgments. An important implication of this study is that both cultural and non-cultural factors impact on the judgments of professional accountants.
Original languageEnglish
Title of host publication2008 AFAANZ conference
Subtitle of host publicationpapers
Place of PublicationSydney
PublisherAccounting and Finance Association of Australia and New Zealand
Number of pages48
Publication statusPublished - 2008
EventAccounting Association of Australia and New Zealand Conference (2008) - Sydney
Duration: 6 Jul 20088 Jul 2008

Conference

ConferenceAccounting Association of Australia and New Zealand Conference (2008)
CitySydney
Period6/07/088/07/08

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