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  • Part 1 The Framework Created by Professor Sidney Gray in

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    The document discusses Professor Sidney Gray's 1988 framework for explaining the development of a country's accounting system. Gray's model shows how culture influences accounting values and a country's financial reporting rules and practices. It can be argued that the model is equally applicable to how accountants in a country apply those rules. This has implications for the comparability of financial statements across countries, even with accounting convergence. Differences in cultural dimensions could lead to differences in applying financial reporting rules. The model also has implications for the internal auditors of a multinational company in ensuring consistent application of accounting policies worldwide.

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    Part 1 the Framework Created by Professor Sidney Gray In

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    The document discusses Professor Sidney Gray's 1988 framework for explaining the development of a country's accounting system. Gray's model shows how culture influences accounting values and a country's financial reporting rules and practices. It can be argued that the model is equally applicable to how accountants in a country apply those rules. This has implications for the comparability of financial statements across countries, even with accounting convergence. Differences in cultural dimensions could lead to differences in applying financial reporting rules. The model also has implications for the internal auditors of a multinational company in ensuring consistent application of accounting policies worldwide.

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    © All Rights Reserved
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    74 views1 page

    Part 1 The Framework Created by Professor Sidney Gray in

    Uploaded by

    Freelance Worker
    The document discusses Professor Sidney Gray's 1988 framework for explaining the development of a country's accounting system. Gray's model shows how culture influences accounting values and a country's financial reporting rules and practices. It can be argued that the model is equally applicable to how accountants in a country apply those rules. This has implications for the comparability of financial statements across countries, even with accounting convergence. Differences in cultural dimensions could lead to differences in applying financial reporting rules. The model also has implications for the internal auditors of a multinational company in ensuring consistent application of accounting policies worldwide.

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    © All Rights Reserved
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    Part 1 The framework created by Professor Sidney Gray in

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    Part 1 The framework created by Professor Sidney Gray in 1988 to explain the development of
    a country's accounting system is presented in the chapter in Exhibit 2.8. Gray theorized that
    culture has an impact on a country's accounting system through its influence on accounting
    values. Focusing on that part of a country's accounting system comprised of financial reporting
    rules and practices, the model can be visualized as follows:Required:Discuss the implications
    for the global convergence of financial reporting standards raised by Gray's model.PART
    IIAlthough Gray's model relates cultural values to the accounting value of conservatism as it is
    embodied in a country's financial reporting rules, it can be argued that the model is equally
    applicable to the manner in which a country's accountants apply those rules:Required:Discuss
    the implications this argument has for the comparability of financial statements across countries,
    even in an environment of substantial international accounting convergence. Identify areas in
    which differences in cultural dimensions across countries could lead to differences in the
    application of financial reporting rules.PART IIICancan Enterprises Inc. is a Canadian-based
    company with subsidiaries located in Brazil, Korea, and Sweden. (Hofstede's cultural dimension
    index scores for these countries are presented in Exercise 4.) Cancan Enterprises must apply
    Canadian GAAP worldwide in preparing consolidated financial statements. Cancan has based
    on Canadian GAAP that are to be applied by all the company's operations. Each year Cancan's
    internal auditors have the responsibility of ensuring that the company's accounting policies have
    been applied consistently companywide.Required:Discuss the implications that the model
    presented in Part II of this case has for the internal auditors of Cancan Enterprises in carrying
    out their responsibilities.View Solution:
    Part 1 The framework created by Professor Sidney Gray in

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