Financial reporting quality in international settings

a comparative study of the USA, Japan, Thailand, France and Germany

Asheq Rahman*, Jira Yammeesri, Hector Perera

*Corresponding author for this work

Research output: Contribution to journalArticle

26 Citations (Scopus)


The purpose of this study is to show the importance of the business contexts of individual countries to understand corporate accounting practices in international settings. Using data from five countries, we show that while agency theory constructs are effective in explaining accounting practices in corporate settings that have a strong agency orientation, such as that of the United States, it is necessary to go beyond such constructs to understand accounting practices in other corporate settings. Given the variety of international business settings, we use a generic theory, institutional theory. To conduct this examination into cross-country accounting practices, we focus on an earnings quality measure based on accrual accounting practices, the abnormal accruals component of accounting earnings. We provide evidence to support the view that with varying business settings we are likely to see diversity in accounting practices that result in different levels of accruals or accruals based earnings quality.

Original languageEnglish
Pages (from-to)1-34
Number of pages34
JournalInternational Journal of Accounting
Issue number1
Publication statusPublished - Mar 2010


  • Agency theory
  • Financial reporting quality
  • France
  • Germany
  • Japan
  • Thailand
  • USA

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