Investigating the Impact of Culture on Accounting Distortions

Document Type : Research Paper

Authors

1 Associate Professor, Accounting Department, Management and Economics, School , Tarbiat Modares University, Tehran, Iran.

2 Accounting Group, economy and management faculty, tarbiat modares university, Tehran, Iran

3 tmu

Abstract

EXTENDED ABSTRACT
Introduction
 The purpose of this study is to investigate the effect of culture on accounting distortions. The culture of any country can affect different social, political and economic aspects of that country. Accounting is a social tool for allocating resources and preventing conflicts of interest and information asymmetry, so it can be directly influenced by culture.
 
Research Questions or hypothesis
The purpose of this study is to investigate the effect of the Culture on Accounting Distortions. For this purpose, the following hypotheses have been explained:
Hypothesis 1: Harmony has a significant effect on accounting distortions.
Hypothesis 2: Hierarchy has a significant effect on accounting distortions.
Hypothesis 3: Dominance has a significant effect on accounting distortions.
Hypothesis 4: Authoritarianism has a significant effect on accounting distortions.
 
Method
 The spatial scope of this study was the companies listed on the stock exchanges of Iran, Turkey, Qatar, Bahrain, Pakistan, Oman, Saudi Arabia and the UAE and the time domain was between 2011 and 2018. The research sample includes 1.729 companies listed on the mentioned stock exchanges.
 
Results
 The results indicate that harmony and hierarchy have a negative and significant relationship with accounting distortions, and on the other hand, authoritarianism and dominance have a positive and significant relationship with accounting distortions. In general, culture can affect various aspects of accounting.
 
Discussion and Conclusion
As social justice, peace and security increase, so does the quality of financial reporting. It should be noted that accounting is one of the most important tools for determining the optimal allocation of resources to increase efficiency (signaling theory). Optimal allocation of resources can provide social security and sustainability of optimal products. Since domination and authoritarianism emphasize more on personal interests and the theory of representation and personal interests is introduced in accounting. When personal interests prevail over collective interests, there will be a lot of abuses and fraudulent reporting.
 
 
 

Keywords

References

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History

  • Receive Date: 12 September 2021
  • Revise Date: 28 November 2021
  • Accept Date: 30 November 2021

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