Accounting and Culture

Pacific Accounting Review
Accounting and culture: The case of Solomon Islands

Abraham Hauriasi Howard Davey
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Abraham Hauriasi Howard Davey, (2009),"Accounting and culture", Pacific Accounting Review, Vol. 21 Iss
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21,3 Accounting and culture
The case of Solomon Islands
Abraham Hauriasi and Howard Davey
228 Waikato Management School, University of Waikato, Hamilton, New Zealand
Abstract
Purpose – This paper sets out to review research on the compatibility between values underlying
western accounting systems and traditional Solomon Islands cultural values. The research takes a
sociological view of accounting to better understand how imported accounting values and practices fit
into, and interact with, local traditions.

Design/methodology/approach – An interpretive methodology uses in-depth interviews and
participant observation. Both inductive and a priori approaches identify and describe major themes.
Findings – The areas of conflict found between accounting themes and traditional Solomon Island
group values relate to: the objectivity and neutrality of accounting; profit and wealth maximisation as
the bottom-line; the separateness of the economic entity; time-based accounting controls; and the
underlying basis of competition for efficiency and effectiveness in western accounting systems.
Research limitations/implications – The challenge is to identify how to adapt accounting and
management practices so they fit into existing local cultural values and practices. Solomon Islanders
must also determine how some of their cultural values can be adapted to suit contemporary economic
circumstances.
Practical implications – The paper recommends that consideration be given to recasting elements
of accounting and management practice so that they better reflect the nature of the society/activities
being represented – namely, the discharge of accountability; valuing intangible business outcomes;
owner-entity separation; time management; and bounded competition.
Originality/value – The research is one of the few studies on the culture-accounting relationship in
a developing and economically poor part of the Asia-Pacific region.
Keywords Accounting, Culture, Interviews
Paper type Research paper
1. Introduction
Accounting is a socio-technical activity involving both human and non-human
resources or techniques, as well as interaction between the two (Perera, 1994). Hence
accounting should be compatible with the cultural and social values of its environment
if it is to have meaning. Not only can social values determine the type of accounting
system but the reverse effect may also occur. As long ago as 1933, Littleton (1933)
pointed out:
Accounting is relative and progressive. The phenomena, which form its subject matter, are
constantly changing. Thus surrounding conditions generate the fresh ideas and stimulate the
ingenious to devise new methods. And as such ideas and methods prove successful, they in
turn begin to modify the surrounding conditions (p. 361).
Accounting can no longer be regarded as a device that merely documents and reports
Pacific Accounting Review the facts of economic activity but rather “as a practice that is intrinsic to, and
Vol. 21 No. 3, 2009
pp. 228-259 constitutive of social relations” (Miller, 1994, p. 31).
q Emerald Group Publishing Limited At a time when globalisation dominates business and accounting activity, there is a
0114-0582
DOI 10.1108/01140580911012494 move towards homogeneous accounting practices and standards (Garrido et al., 2002).
Nevertheless, cultural factors have been identified as an important determining force in Accounting and
a country’s accounting system (Hofstede, 1980, 1987; Violet, 1983). While the culture
culture-accounting debate has focused on the impact of culture on accounting, research
has generally shown a lack of definitive relationship (e.g. Chanchani and MacGregor,
1999; Gray, 1988; Hopwood, 1983; Nobes and Parker, 1998; Perera, 1989a, b). Research
has also focused on the concern that western practices of accounting and the
assumptions they are grounded on may not be universally valid (Chew and Greer, 229
1997; Hove, 1986; Okike, 1994). More recently, there has been a move to consider
accounting in its relationship with indigenous cultures and people (e.g. Gallhofer and
Chew, 2000a, b).
This paper reviews research that investigates the interrelationship between
socio-cultural values of the Solomon Islands and the accounting practices introduced
by Anglo-American influences. There have been arguments in the extant international

accounting literature to the effect that significant and influential differences exist in the
cultural environments of developed and developing countries (Jaggi, 1975; Ngangan
et al., 2005; Perera, 1989b; Wallace, 1990). Background on the Solomon Islands’ cultural,
social, political, and economic characteristics, is provided, followed by the empirical
research approach and results. Finally, the paper discusses implications of the research
findings and draws conclusions concerning accounting and management systems in
the Solomon Islands.
2. Background to accounting, culture and developing countries

One of the common features of the accounting systems of developing countries[1],
including the Solomon Islands, is that their systems are merely extensions of those that
existed historically in western capitalist countries, in particular, the UK, the USA, and
Australia. Typically these systems have been introduced either through colonial
influences and/or powerful investors (Hove, 1986; Perera, 1985). Furthermore, the
accounting practices and traditions were utilised without any serious consideration of
the actual circumstances and needs of the recipient countries.
Recent decades have seen increasing studies being conducted to assess the
suitability of imported western accounting systems to developing countries (e.g.
Askary, 2006; Briston, 1978; Brown and Tower, 2002; Chand, 2005; Hove, 1986; Perera,
1989b; Samuels and Oliga, 1982; Wallace, 1990; Wickramasinghe and Hopper, 2005).
These studies have cast doubt on the ability of these systems to meet the needs of
developing countries with the consequent call for developing countries to identify their
own needs and, based on local circumstances, to develop new systems or modify
existing ones. Given the historical dominance of western imperialism and colonialism,
this is difficult without an appreciation of the impact of accounting and accounting
systems on cultural values and indigenous peoples.
The role that accounting has played in colonisation and its impact on indigenous
cultures is increasingly debated (Gibson, 2000; Neu, 2000). Much of the recent research
highlights the inherent tension between western accounting values and the core local
indigenous values. Often, indigenous values concerning work, land, and kinship are
fundamentally at variance with the values and principles imposed by accounting and
accounting systems (Greer and Patel, 2000). The dominant western accounting system
and practices tend to elevate property and economic values above family and social
values. Gallhofer and Chew (2000b) contrast the values of sharing, relatedness and
PAR kinship obligations embodied in indigenous perspectives on work and land, with the
21,3 values of efficiency, productivity, quantification, reason and logic typically imposed by
accounting and systems of accountability. It is the potential juxtaposition of this
neo-classical view of accounting with indigenous values that stimulated the research
reviewed here.
One of the striking features of previous culture-accounting studies has been their
230 predominant focus on hypothesis testing over theory development (Harrison and
McKinnon, 1999). The majority of these studies were based on Hofstede’s (1980, 1987)
national cultural dimensions and this method has important limitations, notably its
inability to capture the richness of the social and cultural dynamics of organisational
settings. Most of these studies have focused on comparisons between Asian and
western Anglo-American nations and cultures (e.g. Douglas and Wier, 2005; Lau and
Eggleton, 2004; Tsui, 2001) although there is a growing number of studies on

accounting in countries within the Muslim world (e.g. Baydoun and Willet, 1995) and in
Latin American countries (e.g. Frucot and Sheraton, 1991). There is a dearth of cultural
studies on accounting in countries within the developing world, particularly in the
African and Oceania regions; studies cited so far relate to Fiji and Papua New Guinea
(Chand, 2001; Ngangan et al., 2005; Pok, 1995). This is a significant weakness as most
countries in these regions are economically poor and studies to explore how accounting
could be used to more effectively manage their scarce resources are most needed.
3. Solomon Islands background

This section describes the unique cultural, political, social, and economic
characteristics of the Solomon Islands. It describes these characteristics, both as
they existed in traditional times, as well as the form in which they are present in
modern society.
3.1 Political and social organisation

Prior to the arrival of the Europeans and the subsequent declaration of the country as a
Protectorate by the British in 1896, the Solomon Islands did not exist as a unified
political community (Kabutaulaka, 1998). There was no central administration to
govern the country. Instead, the society comprised of numerous autonomous,
self-governing, and self-sufficient units based on kinship. These tribal or clan-based
groups often resided together in small villages or groups of nearby clusters of hamlets.
Even on a single island, there could be several or even up to hundreds of these social
and political groupings. Each tribal group would normally have its own language; even
in the present time, there are reportedly more than eighty languages spoken by the
population of half a million. Most Solomon Islanders speak local vernaculars as their
first language and the country’s lingua franca, Solomon Islands pijin, as their second.
English, the official language, is normally people’s third language. These differences in
languages mirror that within the country established as the Solomon Islands
differences in beliefs and values occur among the various sub-cultural groups. The
focus here is on the more general and dominant ones.
Kinship was the cement of each society, binding the individual to the group. Loyalty
to the group is still required from members to the extent that individual interests would
be subjugated for the common good of the group[2]. Cooperation rather than
competition is demanded from group members and confrontation within the clan is
discouraged. Through these kinship ties and wantokism (a term which refers to the Accounting and
preferential treatment of members of the extended family), the solidarity of the clan is culture
protected and enhanced. The cohesiveness of kinship groups is also maintained and
strengthened through a system of continuous “creation and discharge” of social
obligations by members of the family group. In the past, with constant threats of attack
from other tribes or clans, this cohesion was essential.
Within households and villages, authority is mostly held by the males and is based 231
on seniority. However within clan groups, leadership is exercised either through the
big-man system or the “chiefly” system. While chiefly leadership is largely hereditary,
the position of big-man has to be earned through individual accomplishments and
reputation, such as having substantial crops, pigs, shell money, oratory or
organisational skills. Sharing these with other members of the group is an
important part of developing this reputation (Hogbin, 1964). Codrington (1972)

observed that an individual could be removed from office (authority) to which he had
been selected if he was growing old, was inactive, lost his reputation, or behaved in a
way that ran counter to the moral and ethical codes of his clan. Ordinary people are
expected to obey their leaders in return for their protection and generosity. In the past,
it was common to find communities (either one village or several) being led by a single
man or several men who were typically known as Big Men[3] (Fox, 1975).
At Independence in 1978, the country’s constitution established a central
government. The country adopted a state system modelled on the Westminster
system, consisting of a unicameral parliament and a bureaucracy. This was alien to the
traditional style of government, where individual islands, let alone a whole country,
were not controlled by a central authority. To satisfy demands from island and
regional groupings for greater autonomy, as opposed to centralised state control, the
constitution provided for the creation of provincial governments, of which there are
currently nine.
Despite efforts to create a sense of Solomon Island nationhood, indigenous people
identify with their kin group, village, region, island, cultural community, or language,
group, or even denominational group. Rarely do they think of themselves as Solomon
Islanders. Given the fragmented nature of these communities, island and
language-based groups or institutions still find it difficult to cooperate with each
other or with the state (Otter, 2005). This lack of national consciousness has led to
suspicions, animosity and fear of domination by people from other islands or regions.
Given the need to avoid the perception of one island grouping dominating the rest in
national governance, it is an unwritten rule that the Prime Minister and the Governor
General should not come from the same province or island. There is always an attempt
to spread ministerial portfolios evenly among members from the different island
groups, regardless of whether they are suitably qualified for the post.
Although the route to national leadership is now through an electoral process, the
qualities required for leadership positions remain almost the same as traditionally, such
as, being hospitable, approachable, generous, and being able to deliver tangible benefits
to the people. In prior national elections highly educated and urban-based candidates
have lost to lesser educated but open, well known, and generous rural dwellers.
Those who have acquired the status of a big-man either through leadership
positions, education, business, or employment is held in high regard by their relatives.
However, clan members expect to share in the rewards of those leadership positions or
PAR achievements. Such rewards may include preferential treatment over others. It is
21,3 common practice in government offices and indeed many organisations for officers to
give preferential treatment to their wantoks and friends even if it involves ignoring
company procedures and rules.
Although still widely practised, the wantok system is becoming a subject of
considerable debate with some describing it as a social safety net, while others see it as
232 a “drag net,” being largely responsible for the country’s slow economic progress. It is a
safety net in that people can always count on the support of group members when in
need, on the understanding that such help would be reciprocated in some form in the
future. Problems arise when the support ceases to be a reciprocal exchange. The
concept is increasingly abused. The process of creating or repaying a social obligation
often becomes entangled in nepotism and corruption. The recruitment or promotion of
unmerited candidates on the basis of family connections, kinship ties, and tribal,
provincial, and regional origins, often results from this wantok system.
3.2 Economic and production system

In traditional society and to a large extent in modern Solomon Islands, important
resources such as land, forests and sea are communally owned by groups of
blood-related kin, variably referred to as “tribes”, “clans”, or “descent groups”. This
communalistic system of property ownership meant that no family lacked the basic
necessities of life because everyone was entitled to subsistence resources through
either their patrilineal or matrilineal set of relationships. The property system operated
in an egalitarian fashion (Fox, 1975). In traditional society there was little, if any,
wealth accumulated for transmission from generation to generation. A person was only
considered wealthy by accumulating and dispensing of “valuables”, and that belief
continues (Bennet, 2002).
Although people lived a predominantly subsistence lifestyle, trade in the form of the
barter system did take place among people from different regions and islands. This
involved exchanges of food and certain commodities (such as manufactured items, food
bowls, pottery or scarce raw materials, stone for axes, or pigments and shells). In all
these exchanges it was important that some form of equivalence was obtained for the
goods being traded so that both sides were satisfied. These exchanges were not only
avenues for obtaining goods and services, but also for creating special and personal
relationships between those involved. Such relationships were often built on by
relatives to create a network of ties and obligations that provided stability among the
groups concerned.
Wealth was normally accumulated in the form of pigs, food crops, and traditional
currencies. Such wealth was not solely for individual consumption but for sharing with
relatives, creating obligations on them to reciprocate such gifts in the future. Wealth
could not be accumulated for transmission to future generations as there were social
mechanisms in place to ensure the constant circulation of these valuables, consistent
with the egalitarian nature of these societies (Bennet, 1979). These social exchanges are
not normally recorded; those involved are required to remember the other parties to the
transaction either as recipient or giver in anticipation of future reciprocal acts. Such
exchanges are voluntary and no demands are imposed on either party. Despite their
voluntary nature, these are normally honoured because it is considered “shameful” not
to reciprocate a kind act from a relative.
Currently more than 80 percent of the population still live in rural villages and Accounting and
depend on subsistence gardening and fishing for sustenance. An increasing number culture
are also involved in either cash cropping or some other business activity. Nationally,
particularly in the capital city and some provincial urban centres, there has been some
growth in the monetary economy since the arrival of the early traders in the nineteenth
century. There are firms in services, manufacturing, agricultural and the natural
resources sectors. Most businesses tend to be foreign owned although there are an 233
increasing number of locals entering the business sector. Almost all of the large
commercial operations are foreign owned. Currently, the Solomon Islands’ economy
depends largely on foreign aid and revenues gained from the unsustainable harvesting
of natural resources by foreign companies, mainly logging, and over-reliance on
primary commodities such as fish and copra, and until the late 1990s, palm oil.
Despite the growth and interest in businesses by locals, for many people the
overriding objective for operating a business can be something other than solely for
wealth accumulation and profit. The objective may be to raise sufficient funds to meet
children’s school fees or to build an iron roofed house. Once this goal is achieved, the
business closes until a new objective is found. Whatever the goal of the business, it is
not always effectively achieved due to demands from kin members to share in the
proceeds of the business. The longevity of these business enterprises is usually very
short due to the lack of capital, either as cash or assets (Brooks, 1996).
Like many other developing countries, the Solomon Islands have no state-managed
welfare system as exists in developing countries. People therefore rely on the extended
family or wantok system for support in times of need.
The operation of both the subsistence and capitalist modes of production within the
national economy is resulting in considerable strain on relationships among clan
members over how best the communally owned land and other resources should be
harvested and used. While some want to maintain small scale mixed cropping, others
tempted by the prospect of making quick cash prefer large-scale exploitation in
collaboration with large foreign capitalists (Ipo, 1989).
3.3 Time orientation

One of the important characteristics of the local society is the little importance given to
time. Time in itself is of no value. It is the event on which time is spent that determines
the value of time. Waleanisia (1989) describes the following main characteristics of the
nature and functions of traditional time measuring systems in the Solomon Islands:
first, time was closely related to the natural environment. People’s surroundings, not
some abstract principle, told them when to act. Second, the primary purpose of
calendars was to chart the occurrence of important ceremonies or rituals, rather than
the passing of time. The third feature is the absence of any clear demarcation between
each period, unlike the white man’s calendar where a day has 24 hours or a month has
30 days.
Non-adherence to western time is often categorised as indicating the inability of
Solomon Islanders to organise their time effectively. However “time” is allocated on the
basis of what is more important; visiting a sick relative or chatting to a long lost friend on
the way to work is more important to the Solomon Islander than being at work on time.
Despite the demands on people’s lives from the newer socio-economic order that is
regulated by rigidly structured and uniform time measuring systems, the white man’s
PAR concept of time is yet to win general acceptance among Solomon Islanders (Waleanisia,
21,3 1989). The experience of working by the clock is foreign to people whose work and
lifestyle is regulated more by their daily needs than anything else. People arriving late
to appointments, meetings, and work are still very common occurrences in
contemporary Solomon Island society.
234 4. Accounting development in the Solomon Islands

It is not entirely clear whether accounting was practised in traditional Solomon Islands
societies, although oral accounts tend to point to some rudimentary methods of record
keeping. There has been some tradition of people using knots tied on ropes and
cuttings on trees to help them remember what was owed to, or by, others. However,
most of the records of transactions between different parties were passed on through
oral traditions.
Both public and private sector accounting, as known today, were introduced during
the nineteenth century, at the time of colonial administration by traders and companies
supported by the colonial government (Bennet, 1979). For example, private sector
accounting dates from the turn of the century when British investors developed the
production of copra, cocoa, rice, timber and palm oil (Hardman, 1984). Over the years,
private sector accounting expanded with growth in local commercial activities
especially those associated with expatriate shipping and trading companies and more
recently with banking, insurance and other business interests. In those early years,
almost all of those involved in these commercial activities were expatriates or
non-national accountants, often members of professional accounting bodies in Britain,
Australia or New Zealand.
Public sector accounting in the Solomon Islands reflects the influence of the
Westminster model with its emphasis on the financial accountability of the executive
to the legislature and ultimately to the electorate (Hardman, 1984). The lynch-pin of the
public sector accounting system is the Ministry of Finance, which administers the
Public Finance and Audit Act 1978, prepares and monitors the annual budget, advises
on and coordinates national financial and economic policies, and maintains the
government accounting records. In recent years, public sector accounting has come to
include a plethora of non-profit organisations such as the churches, aid-funded
projects, and other community and voluntary organisations. This largely involves a
cash or fund accounting system that maintains records of receipts and expenditures on
a cash basis.
Although the public sector accounting system is designed to foster financial
accountability, this objective is rarely attained due to an acute shortage of qualified
staff. Most accounting graduates tend to be employed in the private sector, regional
and international organisations, and aid donor funded projects where the remuneration
is more attractive.
The Solomon Islands accounting profession continues to follow the accounting
standards promulgated by the accounting bodies in Britain, Australia, and New
Zealand for observance by their respective members (Hardman, 1984). There has been
no attempt so far to either adopt these standards or formulate and implement those,
which specifically recognise local conditions, influences and problems. Although a
local professional body, the Institute of Solomon Islands Accountants (ISIA) was
established in August 1982, it has remained largely inactive and many recent
accounting graduates are unaware of its existence. It is conjectural if the Solomon Accounting and
Islands can benefit in the same way, and to the same extent, from the accounting culture
standards of a manifestly different type of society and economy.
Although the actual number of qualified accountants is unknown, there is a slow
but growing number of accounting graduates trained mostly in regional universities in
Fiji and Papua New Guinea. The only local tertiary institution, the Solomon Islands
College of Higher Education, provides accounting training up to Diploma level. 235
5. Research approach
Accounting is increasingly seen and recognised as a social practice which can be better
understood through closer engagement with its setting and with greater emphasis on
the perceptions and explanations of the participants themselves (Colville, 1981;
Humphrey and Scapens, 1996; Tomkins and Groves, 1983). This interpretive approach
can offer an understanding of accounting in action by seeking the actor’s definition of
the situation and how this is woven into the wider social framework. For the present
research, the interpretive approach allowed the researchers to focus on the material
issues from the frame of reference of those being studied, that is, the perceptions and
meanings held by participants concerning: the interactive influence of the local culture
and western accounting practices (generally and specifically) on the budgeting system
of a religious organisation; how imported accounting values and practices fit into local
traditions; and how these have impacted on local cultural values.
Participant observation and in-depth interview methods are used to enable more
insight into an individual’s inner world (Hopper and Powell, 1985). Participant
observation involved one of the researchers attending several meetings of the
organisation as well as observing employees going about their daily business. The
interviews were semi-structured to elucidate a wide range of opinions from the
participants and to maintain focus on key issues (key points used to structure the
interviews are listed in the Appendix). The resultant qualitative data were analysed
using thematic analysis, which involved codifying the text (or content) into various
groups or categories depending on certain criteria. Determining these criteria and
deciding in which category to place each view can be very subjective, often a major
limitation of this method of analysis[4]. The method was based on Grounded Theory
(Strauss and Corbin, 1990)[5].
5.1 Participant selection

Interviews were conducted first in 1997 and then in 2007. This timeframe enabled an
understanding into the extent of influence and interaction of accounting values and
local cultural values. The first set of interviews took place with 25 people recruited for
their in-depth knowledge of the social, cultural, economic, and political organisation of
traditional Solomon Islands society, as well as some accounting knowledge. Of these
25, 21 responded positively; 13 took part in face-to-face interviews and eight provided
written answers[6]. Participants were grouped according to their predominant sphere
of activity; they included senior finance officers in the government and the private
sector, accounting academics, members of the accounting profession, religious leaders,
and prominent community leaders (see Table I). All participants were male, indigenous
Solomon Islanders. No female participants were approached, as the researchers could
not readily identify anyone with the previously mentioned qualifications. This was
PAR
Sphere of knowledge No. Identified
21,3
Elders/community leaders Traditional and contemporary Solomon 5 “C”
Islands society
Managers, business owners, private Accounting values and practices in 9 “B”
sector accountants organisations & how they fit with local
236 cultural values
Public sector and not-for-profit managers, Accounting and management practices of 7 “P”
Table I. accountants publicly owned organisations and how
Respondent they fit with local cultural values
characteristics of first
interview set Note: n ¼ 21
anticipated because as recently as a decade ago, influential and senior positions within
society tended to be dominated by males.
The largest Christian denomination in the Solomon Islands was used as a case
study and participants for the second set of interviews were recruited from its
membership. The church is deemed representative of Solomon Islands society since at
least a third of the population claim to be affiliated with it (Solomon Islands
Government, 2002). In addition, its membership is geographically spread throughout
the entire country, even if it is more concentrated on some islands than others. Through
its structures, the church networks extend from the more affluent urban centres to the
remote, subsistence-based rural villages. With its involvement in education and health,
women and youth affairs, not to mention the spiritual well being of a still deeply
religious society, the church plays quite a significant and influential role in the country.
Interviewees were selected from heads of departments at the church’s provincial
headquarters, heads of provincial institutions, administrative heads from dioceses,
clergy and councillors from parishes and ordinary members. Participants included
both members of the clergy and lay people. It should be noted that many of the
interviewees were also either current or former members of church governing boards.
There were also participants from external stakeholders of the church. A total of 25
participants were interviewed including two women. All interviews were conducted
face-to-face (see Table II).
5.2 Interview analysis

The analysis of the transcripts used a close reading of the text starting with an initial
categorisation of the data. Open coding of interview transcripts was initially used,
followed by axial coding where connections were made between categories and sub
categories. This was followed by selective coding, to relate the categories or themes, to
the research purpose. This latter stage looked for implications of codes and their
interrelationships, and the development of core categories and relationships (Dye et al.,
2000; Lincoln and Guba, 1985; Parker, 2001; Ryan and Bernard, 2003; Thomas, 2006).
Two raters were used to classify and categorise the findings for reliability and
consistency in relating the themes to the values. Throughout the coding process quotes
and ideas that helped to define the themes were identified.
Accounting and
Sphere of knowledge No. Identified
culture
Heads of departments at provincial head- Planning, authorisation, monitoring and 11 “PL”
quarters control, communication and coordination,
and evaluation of performance through the
budgeting system
Ordinary members Knowledge of and participation in church 5 “OD” 237
activities. Assessing performance of the
church and its leaders.
Senior staff at diocesan levels Planning, authorisation, monitoring and 4 “DL”
control, communication and coordination,
and evaluation of performance through the
budgeting system
Religious community Distribution of resources by the church 1 “RE”
and communication and coordination
Parish levels Planning, authorisation, monitoring and 4 “PA”
control, communication and coordination,
and evaluation of performance through the Table II.
budgeting system Respondent
characteristics of second
Note: n ¼ 25 interview set
After several thorough examinations of the various responses from the first interviews,
nine themes were identified and these were further classified under the headings:
(1) Behavioural.
(2) Business.
(3) Accounting (see Table III).
The views expressed by the participants are rated according to the degree of
importance each respondent places on them – high, moderate and low[7]. The key
Themes Description Sub-parts
Behavioural Responses concerning the social, political, Forms of accountability

and cultural values and beliefs of Solomon Command and control
Islands society that have a bearing on the Human relationships
way organisations are structured and the
behaviour of people within these
organisations
Business Responses on goals for undertaking Profit maximisation and wealth
economic activities and principles accumulation
necessary for the successful conduct of Separation of economic entity from
these activities ownership
Competition
Accounting Responses relating to the forms of Forms of accounting: Table III.
accounting being practised as well as the Time consciousness Definitions and
importance placed on accounting Personal performance measurement descriptions of themes
PAR factor of analysis reviewed in this paper is the comparison of traditional society values
with those of contemporary Solomon Island society[8]. Traditional society refers to the
21,3 way Solomon Islanders organised themselves and their political, social and cultural
beliefs, practices and values before contact with foreign (European) cultures. Some of
these continue to be upheld, while others have changed to varying degrees.
Contemporary society refers to the way Solomon Islanders live and do things now. It
238 includes values and beliefs that have been adopted from foreign cultures as well as
those that have been handed down from past generations.
From the second interview set, several key cultural themes are identified relating to
the case study organisation’s budgeting system. These themes were further categorised
based on whether they reflect either the Solomon Islands or western cultures.
6. Research results
The themes and sub-themes that emerged from the analysis are illustrated in Figure 1.
At the broadest level, how the respondents viewed the effect of cultural values on
management and accounting practices in Solomon Island businesses and organisations
was summarised into behavioural, business/economic and accounting themes. The
importance of these themes as they relate to traditional society and modern society is
summarised in Tables IV and V. Forms of accountability, command and control, and
human relationships were considered highly important in traditional society while
business and accounting themes were considered of low importance. In modern society
behavioural themes were moderately important while business and accounting themes
were moderately important to highly important. Each of these themes and sub-themes
are discussed with supporting quotes, which follow.
6.1 Behavioural themes

6.1.1 Forms of accountability. Accountability is considered a significantly important
aspect of traditional Solomon Islands society (see Table IV). Accountability can be seen
Figure 1.
The influence of
accounting and culture
and related themes and
sub-themes
Accounting and
High Moderate Low
importance importance importance culture
Theme (%) (%) (%)
Behavioural theme
Forms of accountability 17 81 4 19 – –
Command and control 3 14 18 86 – – 239
Human relationships 21 100 – – –
Business/economic theme
Profit/wealth maximisation – – 2 10 19 90
Separation of entity from ownership – – – – 21 1200
Competition – – 6 28 15 72
Accounting theme
Forms of accounting – – 9 43 12 57
Time consciousness – – 3 14 17 81 Table IV.
Individual performance measurement – – 4 19 17 81 Relationship of themes
and importance to
Note: n ¼ 21 traditional society
High Moderate Low

importance importance importance
Theme (%) (%) (%)
Behavioural themes
Forms of accountability 6 29 12 57 3 14
Command and control 11 52 8 38 2 10
Human relationships 5 24 16 76 * *
Business/economic themes
Profit/wealth maximisation * * 18 86 3 14
Separation of entity from ownership 9 43 8 38 4 19
Competition 8 38 9 43 4 19
Accounting themes
Forms of accounting 7 33 11 53 3 14
Time consciousness 6 29 12 57 3 14 Table V.
Individual performance measurement 5 24 11 53 3 24 Relationship of themes
and importance to
Note: n ¼ 21 modern society
as a relationship involving the giving and demanding of reasons for conduct (Roberts
and Scapens, 1985) and as one participant stated:
. . . leadership positions, in particular Big Men, were achieved rather than inherited. Leaders
lived a very transparent lifestyle knowing that they held such positions only because their
followers approved of them (C1).
Many cultural elements shape forms of accountability in the Solomon Islands. The
very simple structures of most groups/communities, being predominantly egalitarian,
and their close-knit nature enable high levels of accountability. Leaders reside among
PAR followers and their actions are continually observed and assessed by their followers
21,3 according to group norms and values:
. . . traditional life is a very transparent lifestyle. Everyone lives and works together and is
very close to each other (B1).
As a collectivist society, accountability is discharged not only by the leader but also by
240 the entire tribe or clan that he represents. The group takes collective responsibility
towards actions of either the chief or any member of the group. In essence there is
collective accountability:
. . . wherever the chief moves, his voice is that of the people, it’s the voice of the tribe. If the
chief makes a mistake, he’s accountable, the entire community is accountable and every
individual is accountable (PL2).
By contrast, accountability in modern Solomon Island society was considered highly

important by only 29 percent of the respondents (see Table V). Over half of the
respondents qualify their rating of accountability and many noted that accountability
in their organisations is still inadequate.
Family-owned businesses are predominant, and these are largely managed by
family members. For these businesses, trust underlines the relationship among family
members:
Their performances are based on trust and no one is required to produce any sort of reports to
show accountability (B6).
This relationship between trust, and accountability is also reported in a study of the
accounting practices, used by missionaries among the Coahuiltecan Indians in the
eighteenth century (Holmes et al., 2005). Missionaries were given greater flexibility in
their accountability for inventories since their relationships were of high trust. In
contrast, the relationship between the missionaries and the Indians was one of low
trust and so the missionaries gave detailed instructions to the Indians including
accountability in measurable form with ex ante reports.
In Solomon Island public bodies and organisations, accountability is often formally
prescribed through their constitutions, yet despite these formal requirements,
contemporary leaders are considered less accountable than their traditional
counterparts. Several reasons could explain this. First, traditional leaders are personally
accountable to the whole community based on norms and values that are well understood
by both the leaders and the followers. Contemporary leaders, however, are required to be
accountable to specific individuals or institutions based on duties and rules many of which
could be unclear to the common people. Furthermore, communication between leaders,
workers, and the ordinary person is often irregular, only through formal channels, and
there may be poor goal clarity and congruence in the relationship:
Leaders may not be directly accountable to those they serve but indirectly through some
institutionalised process or body . . . They [the leaders] are often far removed from their
followers . . . (P3).
The previous quote illustrates an accountability framework based on the
principal-agent model. This hierarchical model assumes the principal has certain
“rights” to make demands on the conduct of the agent as well as to demand reasons for
the conduct undertaken by the agent (Chew and Greer, 1997).
Second, in modern Solomon Island organisations, power is typically formally vested Accounting and
in leaders rather than being achieved through their status and personal qualities. culture
Although they are legally required to show accountability, there are feelings that some
of the organisations and individuals, by virtue of their influence and power, are not as
accountable as they should be:
Those big people, it’s hard to get them to be accountable. They can do everything because
they have the power to do it. And people also fear them, to really make them accountable, 241
because our laws gave them such powers (PL2).
Duncan (2008) suggests that the reluctance to hold those with power and authority
accountable could be a combination of respect for those in authority and the smallness
of the population. People in positions of power and with prudential oversight have
close family or personal relationships, thus rendering standard governance checks and
balances of supervision, auditing, reporting, and sanctioning largely ineffective.
A further explanation for the limited accountability of contemporary leaders relates
to the need for clearly defined authority and responsibility for effective accountability.
Within the case study senior positions, especially within the clergy, have no clear job
descriptions:
People have a lot of expectations from the priest apart from just giving Holy Communion. But
most do not even know what his actual responsibilities are . . . So it is hard to make him
accountable if we do not really know what his responsibilities are (OD2).
People in contemporary Solomon Islands society still hold their leaders accountable
through physical observations of their actions or the results of their decisions, as they
do in traditional societies:
People’s eyes are open. In a church organisation, it is difficult to convince them to give more
money to the church if they see the organisation owning expensive assets such as vehicles
and buildings and its employees enjoying various other benefits compared to the ordinary
folks (PL4).
The extent of accountability differs between traditional and contemporary Solomon
Islands society. Leaders in traditional societies are highly accountable; these societies
are closely knit and the power to remove leaders is retained by the community and can
be exercised at their discretion. In contrast, leaders in contemporary organisations are
required to formally discharge their accountability to positions and institutions within
the organisational structures rather than to the community. Accountability by these
leaders is perceived as weak.
6.1.2 Command and control. The command and control sub-theme relates to the
manner in which authority is exercised within the organisation to get things done and
to maintain control. Traditional societies are egalitarian and collectivist; leaders do not
exercise dictatorial command and control over their subjects but operate through
consultation and consensus. It is a participative culture whereby responsibilities are
normally delegated among members of the group:
The chief and leaders make decisions together by consensus and these are passed on to the
people . . . and he [the leader] ensures these are followed (C5).[There is] an absence of the
boss-servant relationships that we have in modern organisations, since one has to lead by
example (C1).
PAR These comments and values are supported by 86 percent of the respondents giving
21,3 only qualified acceptance to command and control in traditional society (see Table IV).
Similar findings are found in Australian Aboriginal communities where decisions are
made at the grassroots level and formal means of control are unnecessary (Chew and
Greer, 1997).
In contemporary society, there is a shift to favouring command and control with
242 half of the respondents feeling that having the power to exercise absolute command
and control in organisations is necessary. This may result from the fact that in
contemporary businesses and organisations in Solomon Islands individuals and
corporate bodies are assuming positions of responsibility for which they are fully, and
individually, accountable. They need the authority to exercise command and control
over others to get them to perform in ways that will produce intended outcomes. The
hierarchical structure of the case study organisation enables management of the
command and control variety. In turn, governing bodies are given the responsibility of
ensuring such powers are being used appropriately by management:
. . . governing bodies of institutions should also “keep a check on their administration”. In this
way, it encourages management of activity centres to be honest, prudent and accountable.
Also a lot of problems could be sorted out before they got worse (PL7).
The adoption of western organisational structures and the consequent adherence to
command and control structures has produced positive outcomes in that it allows
managers and leaders to exercise their authority to get things done. However, this is
often undermined by certain cultural elements; for example, regionalism and
wantokism often exist making the management function of control problematic. People
prefer giving their loyalty to their specific tribal or regional Island groupings than the
entire organisation:
People . . . come from different kinship groups . . . There is still a general reluctance to give
full loyalty and commitment to a group that does not bring direct benefits to extended family
group (B2).
Furthermore, relatives or people from the same regional or island group may collude to
undermine control within the organisation due to the need to care for one another:
If you look at some dioceses, almost all employees are related, they’re blood relatives. Most of
them are handpicked. So to emphasise whatever controls is difficult. Because this is my uncle
who’s made the mistake or this is my uncle asking for a salary advance. When they decide on
a particular course of action, they’ll all go for it whether it’s right or not (PL4).
The vesting of formal command and control powers on individuals and bodies within
organisations often causes individuals and groups to use such authority for personal
interests and gains:
As a general observation, there is a lot of nepotism and wantok business in many decisions of
the boards. If we’re going to talk about fairness, justice and equality, these should also be
displayed by the boards (PL3).
Command and control was not an important sub-theme in traditional societies. In
contrast, the formal mechanisms of command and control are becoming necessary in
modern organisations, although traditional themes can still prevail.
6.1.3 Human relationships. Maintaining and developing human relationships is the Accounting and
most important sub-theme embraced in traditional Solomon Islands society (100 culture
percent rated this aspect as highly important, Table IV). This is not surprising since
people live together in communities according to their tribes or kinship groups. They
depend on each other for survival through cooperation and mutual support. To
maintain the cohesion and solidarity of the clan or tribe, the group dominates the
individual: 243
Individuals are responsible not only for themselves or immediate nuclear family but also to
extended family . . . Keeping the relationship among extended family members close and
intact is an important goal in their activities (B7).
The emphasis is placed on the welfare of the group rather than the individual. Freedom of the
individual is contained in order to maintain relationships within the group (C4).

This emphasis on relationships has implications for economic activities. The
promotion and maintenance of social relations take precedence over material wealth
and individual interests:
Solomon Islanders value human relationships over profits and material possessions. The
human being is more important than money and jobs (C1).
Events or activities that pose a threat to these relationships are promptly and
vigorously repressed. In Australian Aboriginal communities the maintenance of
personal relationships also takes priority over the accurate handling of quantities or
the keeping of prior agreements (Greer and Patel, 2000).
Results for modern society (see Table V) show respondents are more reserved over
the dominance of the human relationship sub-theme in economic activities. Only
one-quarter of respondents rated human relationships as having high importance in
modern Solomon Island society. This shift is typified by one respondent, who stated that:
. . . the key to success for businesses . . . is to strike a reasonable balance between meeting
your social obligations and ensuring the survival of the business. The businessperson must
try to minimise his/her businesses losses as much as possible without hurting his/her
relationships with relatives (B1).
The human relationship sub-theme received less support in relation to modern
organisations but it still has significant impact on the way modern organisations are
managed. For instance, the need to maintain group harmony often results in people
avoiding conflict and being reluctant to openly disagree with or criticise other group
members:
this particular person have always been very vocal on issues affecting this organisation but
now that he is in this board where his boss is also the chairperson, he’s almost become totally
silent (PL4).
The importance of maintaining relationships also means that people who breach
organisational rules are more likely to be dealt with through social conciliation and
forgiveness rather than legal sanctions:
. . . there is a lot of misuse of money within church parishes . . . but people tend to reconcile or
make up rather than getting the culprits into courts or to prison. They emphasise social
conciliation, which is the overriding practice at the community levels (PL2).
PAR Human relationships are the foundation of Solomon Islands society. In modern
21,3 organisations, while there are increasing sentiments towards appropriate control and
management, the results show that human relationships are still considered an
important influence.
244 6.2 Business/economic themes

6.2.1 Profit maximisation and wealth accumulation. As discussed previously, for
Solomon Islanders profit maximisation is not of the utmost importance. Kinship
relationships underpin all activities. Almost all respondents considered profit making
and the accumulation of wealth to be of low importance in traditional Solomon Islands
society (see Table IV). While people did engage in trade, there was no intention to profit
from these exchanges. Profit making is discouraged since:

. . . it [profit maximisation] conflicts with our cultural norm of sharing. Profit maximisation
denotes exploitation, alienation and self-interest. Social status is not achieved from being rich
[economic wealth] since the emphasis is more on love, peace, kindness and generosity (P6).
. . . we regard our relationships with extended family as equally important [as profit making]
. . . Profit making must not dominate group relationships (P4).
Given the communal nature of the society, the virtues of caring, sharing and giving are
embraced, while acquisitiveness and hoarding is discouraged:
We encourage sharing and giving with members of our extended family groups. One’s status
is enhanced not by receiving or accumulating but by giving and sharing his
wealth/possessions with others (P4).
Similarly, among Australian Aborigines, Gibson (2000) found that the notions about
the accumulation of economic goods lack meaning and that the most prized wealth
consists of wisdom, kinship, and knowledge of the dreaming.
In contemporary Solomon Islands society there was a qualified acceptance of the
importance of profit and wealth maximisation sub-theme (86 percent rated it
moderately important, Table V). This is a marked shift in value. However, none of the
respondents reported that profit making is highly important; there is still a reluctance
to treat profit making as critical and often a business is guided by social norms of the
owner and his family.
While the profit motive for businesses is gaining some acceptance, there remains a
strong feeling that the extended family comes before profits:
. . . while businesses do want to make profits, relationships must come first (B4).
Profits are necessary for the survival of businesses but this is often undermined by
cultural obligations:
It is not possible to maximise profits because of the continuous demands on the business from
personal needs as well as from relatives . . . sharing your wealth with relatives is still very
important and you cannot ignore it just to maximise profits (B7).
The dilemma, particularly for younger, educated islanders setting up in business, is
how to balance the two views: the traditional belief that it is unacceptable to profit from
exchanges with relatives, versus the knowledge that business profit helps ensure
continuance of the business. The traditional values of reciprocity and group solidarity Accounting and
impact on the exchange of goods and services and heighten this dilemma. culture
In not-for-profit organisations, maximising profits can be equated to the effective
and efficient use of resources. However, this may not necessarily be consistent with the
perceptions of fairness and equality, which are cultural values that tend to dominate in
this sector:
. . . benefits of development have to be spread out as far as possible. While we may try to put 245
resources into priority areas, we must not do it to an extent that we become perceived as
one-sided (PL7).
Achieving profitability and maximising the economic returns from resources is
increasingly important as a theme in the contemporary society, but this is still often
superseded by cultural demands of sharing with relatives and ensuring fair

distribution of resources among group members.
6.2.2 Separation of entity from ownership. The separation of the economic entity
from its owners is a cornerstone of western accounting. It involves treating
transactions that are personal to the owner(s) as distinct and separate from those of the
economic entity. This sub-theme is foreign to the traditional belief in unity between the
owner and his/her property:
Traditionally people have very close, natural and often spiritual, attachment to their property
and possessions. They cannot be separated. People treat their possessions as being part of
themselves. In terms of modern businesses, owners will regard them as being personal
properties that are used to generate income or meet the needs of the family and relatives
(C5).The business is a personal belonging . . . People do not separate themselves from the
things that they own (P1).
This is similar to the values held by Australian Aboriginals. In that society, to own
something was to also have an obligation to share and have the right to be asked to
share; those expressing such needs also have strong rights to have their requests met
by other members of that society (Gibson, 2000).
All of the respondents rated the separation of entity from ownership theme as low
importance in traditional society (see Table IV). Solomon Islanders do not distinguish
between capital and income. Furthermore, a business fulfils a social function by
generating income for both personal use and social or kinship obligations. This failure
to separate the business entity from the owner is widely acknowledged as a key factor
in the high failure rate of locally owned businesses, particularly as owners are obliged
to help their relatives from the resources of the business.
However, in contemporary society, there is a growing realisation that applying the
separation concept may help in the ongoing survival of modern business with almost
half of the respondents rating the concept as highly important, and a further 38 percent
giving it qualified support (see Table V).
Despite a growing realisation for the need to apply this principle in the management of
businesses and organisations, its actual application in many indigenous-run organisations
is still minimal. The care-taker of a business owned by a women’s group stated:
Every time there’s an overseas trip (by officers of the women’s group), they will make
requests for funds to meet their travel costs, not as a loan but direct grant (from the business’
earnings) . . . maybe because they thought it (the business) is theirs and it is meant to generate
income for the running of their organisation (OD4).
PAR This reluctance to separate business from personal affairs was confirmed by Lenga
21,3 (2005) who examined the effectiveness of an aid donor’s project aimed at the
rehabilitation of incomes in villages affected during the civil unrest of 1997-2002. A
project that involved supplying a group of women with young chicks and feed to be
raised for sale failed because friends and relatives of the women asked for fattened
chickens but felt no obligation to pay for them.
246 Separating the affairs of the business from those of the owner(s) is being recognised,
but, its application, is often undermined by cultural pressures to share business
earnings with relatives. The effect of cultural values can often impact adversely on the
long-term survival of businesses.
6.2.3 Competition. In the western world competition is considered essential for the
efficient allocation and use of resources. In traditional Solomon Islands society,
competition that results in one individual gaining at the expense of other group
members is discouraged (72 percent rated it as low importance, see Table IV).
Competition within the extended family group is therefore considered improper since it
threatens the solidarity of that group; members of the group work for the benefit of the
whole group. This is essential to ensure the group remains united to fend off any
attacks from rival groups:
[While] people in traditional societies were also individualistic, the group serves the benefit of
the individual. There were egalitarian arrangements to ensure no one becomes much better
off than the rest. In other words, they compete in groups and not as individuals (C3).
To minimise the potential for competition, important resources both on the land and at
sea are communally owned and everyone has equal access and rights to their use. In
addition, relationships among group members are maintained by a continuous cycle of
reciprocal exchanges that ensures wealth is redistributed among members, and so no
one is either materially better off or abjectly poor.
Despite the lack of competition for personal or family gain in traditional society,
results show that the theme is growing in importance in modern Solomon Islands
society (see Table V). With the adoption of the western concept of private property,
individuals are obtaining exclusive rights over resources and competition is now
possible. In the case study organisation each activity centre strives for a greater share
of resources during budgeting:
. . . there is competition during the course of preparing the budget. All activity centres want to
increase their share of organisation’s income; overall they all want more money and trying to
do everything or wanting to have more infrastructures (PA5).
The composition of many of these activity centres reinstates many of the traditional
characteristics of societies, of smaller groups within a larger group.
Despite competitive tendencies, the traditional values of sharing and relationships
(6.1.3) are difficult to bypass:
The Solomon Island culture does create some resistance to competition in particular among
close family or extended family members . . . (B1).
There is still a reluctance to adopt competitive practices within organisations since it is
feared that setting employees to compete against one another can lead to negative
consequences:
Businesses now compete against each other. However within organisations, workers tend to be Accounting and
close and often develop very close relationships similar to family groups, and hence competing
against one another is not welcome. People still prefer working together as a group (C4). culture
Many of the respondents (43 percent, see Table V) still consider competition as only
moderately important even in modern society. Many modern businesses are reluctant
to initiate incentive schemes that link rewards to performance and which require
employees to compete against each other to maximise individual benefit: 247
There are no processes and systems to encourage competition and it is doubtful whether even
if there were incentives for competition, people would have the same competitive spirit as in
western countries (C1).
The competition sub-theme is becoming more prominent in commercial undertakings,
especially between unrelated persons and groups, but it is still frowned on and avoided
among relatives or closely associated individuals and groups.
6.3 Accounting themes

6.3.1 Forms of accounting. Conclusions as to whether accounting was practised in
traditional Solomon Islands society are conjectural and depend on how one defines the
term, accounting[9]. Almost half of the respondents believe that traditionally Solomon
Islanders did practice some form of accounting, although it was not an essential
function within their economic activities. A participant described what was believed to
be a form of accounting:
Recording is done using different methods such as cuttings on tree trunks, using small stones
. . . Our people do things in return to what is done for them . . . (C3).
The overriding objective of any form of accounting is to remind those who need to
reciprocate gifts or help rendered by others. Determining the profit from an exchange is
unnecessary since equivalence in value is sought between parties to a transaction.
Furthermore, any accounting processes employed in traditional times would have
relied on the oral tradition or some other rudimentary methods. Traditional accounting
was likely to be very different from the white man’s system since the new system:
. . . involves written records, requires the use of the mind, formulas and things like that . . . we
Melanesians lacked understanding of accounting; we’re not used to managing money (PL1).
In modern businesses and organisations, there is increasing importance attached to the
accounting theme, reflecting a growing demand on organisations to maintain proper
accounts for control purposes and for demonstrating their stewardship over resources
to stakeholders. In many organisations, having an effective accounting system is
formally prescribed; for instance, the constitution of the case study organisation
requires trustees to:
. . . lay their accounts before the Executive Council annually and provide copies of such
accounts and a report regarding them to the General Synod [supreme decision making body]
(PL7).
Respondents indicated that accounting is increasingly used in modern organisations,
but that it is yet to play a crucial role in the activities of businesses and organisations,
as is the case in developed economies. Some view accounting as being applied in
publicly owned organisations largely to meet statutory requirements:
PAR From my experience, no one in this decision making body knows how to read the accounts . . .
nor do I think they really care about the accounts of the whole church . . . whether it’s overspent
21,3 or what. All they worry about is that it gets audited, because it’s a statutory requirement (DL2).
In family-owned businesses, accounting systems are relaxed. The overriding objective
may not be profit maximisation with non-financial goals (and measures of
performance) being more relevant:
248
Small businesses . . . don’t find accounting as particularly necessary since they can still run
their businesses quite successfully without a good system of accounting (B2).
In many organisations that do use accounting to produce financial reports, many of
their members are unable to understand the significance of these reports. These
financial reports tend to be:
. . . presented in a very foreign language, making it very difficult for the ordinary village
person to understand them (PL2).
Hence for many decision makers including myself, financial reports is an agenda that we
always consider a “give away” (PA6).
The forms of accounting used in the public organisation and businesses enable
accountability to be discharged and legal requirements satisfied. However, accounting
information and systems are often incompatible with the non-financial goals of
Solomon Island businesses.
6.3.2 Time consciousness. Most performance measurements that are translated into
financial figures involve the element of time. Time is crucial in the western style of
performance measurement. This contrasts with traditional Solomon Islands society
where the time consciousness sub-theme is of little importance (86 percent, see
Table IV). Time does not dictate activities but rather:
. . .an individual’s efforts and decisions are determined by personal convenience (C1).
Generally, doing what needs to be done is more important than when it is done and
how long it takes to be done. The attitude is that:
. . . time does not do the work; it is the person who does the job (P5).
This lack of urgency is often misconstrued as laziness and lack of initiative. The
relaxed approach to time also hinders systematic planning by these societies:
Culturally, Solomon Islanders live in the present. There is no constant looking to and
planning for the future . . . There is always time to get things done, even if not accomplished
today . . . (C4).
In the contemporary society, there is an increasing time consciousness with 86% of
respondents rating time as highly or moderately important (Table V). Evidence of this
in the work place is still minimal. One respondent explained how he has had to divide
his time between his business and working together with members of his community
and extended family (B8). A participant observed how the relaxed approach to time
leads to the non-production of financial reports:
In the last six years . . . the financial reporting system has not come up to a good level. And
the main reason I see is what we call laziness, which is still strong with us. We waste a lot of
time, time, which we could have used to do such work (PL1).
The sub-theme of time consciousness is yet to win general acceptance among Accounting and
Solomon Islanders (Waleanisia, 1989) despite demands for more structured and culture
uniform time measuring systems. The experience of working by the clock is foreign
to people whose work, and lifestyle, were regulated more by their daily needs than
anything else.
6.3.3 Personal performance measurement. Accounting is predominantly about
measuring performance. The way performance in a society is measured is vital in 249
determining how accounting systems ought to be designed. From a western
perspective, personal performance measurement enables accountability and efficiency.
This study, however, shows that individual performance measurement is of very low
importance in traditional Island society (see Table IV). As a collectivist society,
isolating and emphasising individual performances has the potential to undermine the
solidarity of the group:
Traditionally when people engage in-group activities, the contribution of each individual is
not formally measured and isolated from that of the other members (C5).
We look at the final outcome . . . People prefer being recognised as part of the group
performance and this helps in the close bonding of the group (C2).
Since time also has a different value in Solomon Island culture, efficiency is not an
issue.
A case study respondent describes how participation in-group activities is valued
more than their individual productivity:
The value of being a member of a tribe is one that must always be upheld. Whenever
members are required to make contributions to community activities, even if a member
cannot contribute at the same level as others and their contribution is not received at the same
time, it is still acceptable by everyone (PA5).
The findings showed growing recognition in modern organisations that measuring
individual performance is necessary to improve performance; one-quarter of
respondents (see Table V) consider it very important for the efficient operation of
their organisations, and a further 53 percent acknowledge its importance, although
application in their organisations was often noted as being minimal.
Similarly, the respondents recognised that performance measurement and
evaluation in modern organisations is necessary especially where resources are scarce:
. . . we know what difference all the money we’ve been receiving . . . has made to our people.
Where has it gone? We must find out whether it has benefited our grassroots. It’s their money
as well, not just for few us who sit in the offices (PL3).
Within the theme of personal performance measurement, one of the hindrances
towards an effective performance evaluation in many organisations is the lack of clear
and measurable standards. This is particularly so in not-for-profit organisations which
are predominant in the Solomon Islands where goals are often non-financial and more
intangible than tangible:
. . . the only difficulty lies in identifying the right goals and standards to be used for
measuring individual performances (C2).
PAR While the measurement of personal performance is a strong theme in current
21,3 accounting systems, this does not necessarily sit well with Solomon Island values of
cooperation, sharing, and engaging in communal fashion. In addition, western
accounting does not readily provide for the measurement of intangible, non-monetary
goals, which are more relevant to local organisations.
250 6.4 Comparison of the results

Between the two sets of interviews, the global economic system has necessitated the
adoption of accounting systems that are recognised and understood beyond the
Solomon Islands. Despite the increasing application of western accounting systems as
required by transnational businesses, foreign investors, and public sector and aid
organisations, there still appears to be a relatively strong preference to acquiesce to the
demands of the local culture where these conflict with the values of western
accounting. For example, employees may prefer taking time to fulfil their social
obligations rather than the timely performance of their duties.
The results of the most recent interviews demonstrate that not all elements of the
western system are antithetical to values of the local culture. There are some common
traits between the two cultures. For instance, while competition is predominantly
considered a western characteristic, Solomon Islanders also compete. However, the
form and objective for such competition differs in both cultures. Data from the second
interview set, also show that where conflicts exist between elements of the two
cultures, dysfunctional consequences ensue.
The applications of the various themes from these data are illustrated in Figure 2.
Figure 2.
Comparison of application
of themes
6.5 Implications Accounting and
The research shows several areas of conflict between Solomon Island culture and the culture
“culture” of western accounting. These areas of conflict and comparison are
summarised in Table VI. The dominance of traditional values and relationships can
hinder progress in the modern economic environment, yet at the same time the
imposition of contradictory western values can undermine the identity and solidarity
of the Solomon Island people. Conflicting values could even undermine the ability of 251
local organisations to achieve their objectives.
Particular implications are as follows:
(1) Human relationships are valued over material wealth and possessions. Kinship
ties are a powerful influence on behaviour, but there is evidence that Solomon
Islands society is moving away from its traditional communal emphasis to

more individualistic values.
Theme Sub-theme Traditional SI society Contemporary SI society
Behavioural Forms of accountability Close knit community Leaders often remote

themes ensures greater from subjects, less
transparency, personal transparent, often
accountability from discharge accountability
leaders through institutions
Command and control Leaders operate through Individuals and
consultation and institutions given formal
consensus powers to command and
control subjects
Human relationships Kinship relations are Kinship relations still
paramount and cement important but under
societies strain from demands of
capitalistic activities
Business/ Profit maximisation and Profit making and wealth Profit making for
economic themes wealth accumulation accumulation business is preferred but
unimportant, if not not at the expense of
discouraged family relationships
Separation of business No separation exists in Accounting is promoted
entity from ownership traditional worldview along this principle but
limited application
Competition Takes place between Implicit competition
members of out-groups, among related groups and
discouraged between and individuals. Open
among family groups competition only between
unrelated groups
Accounting Forms of accounting Mostly oral transmission. Use western accounting
themes Use of physical objects to systems mainly to meet
record social obligations statutory obligations
Time consciousness Work done at personal Value of time is being
convenience. Time is recognised, but minimal
unimportant adaptation to its demands Table VI.
Personal performance Being part of group more Recognised in modern Traditional SI society
measurement important than personal organisations but limited compared with
contribution application contemporary SI society
PAR (2) Accountability and transparency are very important traditional concepts: in
21,3 particular leaders are highly accountable largely due to the simple structures of
these societies. In modern island society, however, accountability in
organisations is perceived as inadequate, possibly due to their complex
structures.
(3) There is a conflict concerning command and control. Traditional leaders are
252 consultative with decision-making by consensus so preserving the solidarity of
the group and enabling cooperation. In modern Island society, there is some
misuse of power and a reluctance to involve others in decision-making
processes, particularly where such powers are legally conferred, rather than
earned through one’s efforts and status.
(4) Profit maximisation is definitely not the single most important goal for Solomon
Islanders carrying out business activities. High consideration is still given to
maintaining relations with kinship groups, through sharing of one’s wealth, and
this cannot be easily sacrificed for the maximisation of wealth.
(5) The concept of separating the business entity from ownership is foreign to
Solomon Islands society. People feel closely attached to their possessions or
property and these cannot be separated. Sharing of possessions is obligatory.
(6) Competition within kinship groups is discouraged in traditional society, yet
most private businesses in urban centres consider competition as essential for
their survival. There is no sense of cooperation among the different businesses
and the rule of “grow or perish” is playing a larger part in their operations. In
the rural communities where people are closely related, competition remains
minimal since it is a threat to their solidarity.
(7) Competition among workers within the same organisation is still minimal and
is normally avoided since the underlying cultural value is for group solidarity
above individualism.
(8) The accounting system itself remains under-developed and is applied largely
for statutory requirements.
(9) In traditional society, time means very little to Solomon Islanders. The
consequences of this lack of time consciousness and the importance of family
obligations conflict with western perspectives on management.
(10) Personal performance measurement is rarely practised in traditional society.
When people work in groups, the final outcome is regarded as the performance
of the entire group. Many businesses are now adopting western methods of
assigning duties and responsibilities to individuals along with individual
performance measurement.
7. Conclusions
Core indigenous values are increasingly threatened by the integration of the Solomon
Islands into the global economy and the dominance of narrow economic values. It is
important to highlight how compatible or otherwise these western values are with
these indigenous values and to consider how these conflicting values could be adapted
to engender positive outcomes.
7.1 Key differences between western accounting and Solomon Island cultures Accounting and
(1) Accounting emphasises objectivity and neutrality whereas local norms elevate culture
human relationships that demand preferential treatment of kinship members.
Accounting as a control tool within organisations could be undermined if
infiltrated by human relationships.
(2) Accounting promotes profits and wealth accumulation as the bottom line in
contrast with the local emphasis on human relationships maintained through
253
sharing and caring for each other. The ability of a business to survive long-term
could be seriously jeopardised once its income is being used on non-business
related costs.
(3) The central principle of separating the economic entity from its owners conflicts
with the predominant local belief that a person and his or her property or
belongings cannot be separated. The business owner is expected to share the
income of the business with relatives both to create and discharge social
obligations.
(4) Most accounting measurements involve the element of time, not only giving
pre-eminence to time but also treating it as a commodity. This contrasts to the
relatively little attention given to time in Solomon Islands societies. This may
render time-based accounting controls and performance measures
inappropriate in the local context.
(5) Accounting encourages competition based on the assumption that this
promotes efficiency and effectiveness. However, while local norms do not
discourage competition altogether, that which is likely to result in groups
benefiting at the expense of others and which may cause disharmony in the
community are avoided and discouraged.
7.2 Issues for consideration

The challenge is to identify how to adapt accounting and management practices so
they fit into existing local cultural values and practices. At the same time, Solomon
Islanders must also determine how some of their cultural values can be adapted to suit
contemporary economic circumstances to ensure successful participation in the
modern economic system. The authors recommend that consideration be given to the
traditional society concepts and values in recasting elements of accounting and
management practice so that they better reflect the nature of the society/activities
being represented. Some of these are discussed in the following:
(1) In establishing forms of accountability, consideration should be given to the
diverse and fragmented nature of Solomon Islands societies. The workings of
modern organisational structures, management systems, and mechanisms of
accountability need to be better understood by both leaders and followers, as it
was in traditional societies. One way of achieving this is through closer and
more frequent interactions between leaders and their subjects so accountability
is discharged in a more timely, open and personal fashion rather than being
done through institutions.
(2) Accounting and management systems should recognise that for many Solomon
Islanders, developing and maintaining their personal relationships is equally or
PAR even more important than increasing their economic wealth. Accounting
21,3 systems privilege profit measures in financial reports while overlooking as
unimportant the social relationships built and enhanced in the course of
carrying out business activities. The financial report may need to include
results beyond profits and include the intangible and subjective outcomes of
organisational activities such as contributions to extended families and the
254 promotion of peace and harmony within communities.
(3) Some consideration should be given as to how the principle of separation of
accounting entity from the owner could be effectively applied locally. While it is
possible in theory to treat a business as separate from the owners, in practice
the demands on the business, not only by relatives, but also by the owners
themselves, to benefit from its income often starve the business of vital capital
to sustain itself. We suggest businesses apply the separate entity concept but
remain proactive in philanthropic activities so that wealth generated from the
use of its capital is shared with the local community. Greater understanding
that the business needs to properly balance business income between charitable
purposes and business survival and growth is essential.
(4) Management and accounting systems should consider the relaxed approach to
time still displayed by many Solomon Islanders in the work environment.
Reasonable allowance should be made for the fact that plans and tasks may not
necessarily be achieved within prescribed timelines. Task-based performance
could be more appropriate in Solomon Islands than time based activities. There
should be greater flexibility in time management within organisations, allowing
workers the ability to fulfil important social obligations but with minimal
disruptions to organisational performance. However, locals must also be alerted
to the fact that the country is part of the global economy, where time is of the
essence. They must learn how to achieve a reasonable balance between the local
approach to time, as well adjusting to the demands of economic partners who
have a different time consciousness. The local view of time is too often used as a
convenient excuse for people’s sluggishness and laziness.
(5) Accounting systems should promote some forms of competition to raise
efficiency and effectiveness. The contemporary situation is more conducive to
competition than in traditional times. In the urban centres, businesses are
owned by unrelated people, and so no relationships would be at risk from
competition. The growth in the population compared to available resources
necessitates that businesses and organisations operate with a high degree of
efficiency and effectiveness to improve performance. However, competition that
encourages only certain groups to benefit at the expense of the masses should
be avoided while those that result in gains to the vast majority should be
encouraged.
Notes
1. The exact definitions of terms such as “developed” and “developing” are still matters of
debate which is outside the scope of this paper.
2. The present tense is used in this section since many of these beliefs and values still exist and
still form part of the underlying cultural perspective of Solomon Islanders.
3. Although the positions of Big Man or chief still exist in most islands, their powers and status Accounting and
have been greatly weakened by western forms of government. Political groupings have also
expanded to include people from different clans, tribes, and islands. culture
4. However, since one of the authors is a Solomon Islands national, it was considered that his
experience and knowledge would enable useful selection of categories to be made and
appropriate codification of participant responses. Interviews were conducted in Pidgin, the
national language. Any loss of meaning in the translation to English should be minimized by 255
one researcher being fluent in both.
5. This method calls on the researchers to use the data to suggest categories and draw them
into groups based on similar properties.
6. Interviews were transcribed and returned to participants for confirmation and changed if
necessary. It was considered that this exchange process mirrored an interview process such
that it was appropriate to combine the responses from the two.

7. The following scales were used: High importance: a theme is ranked under this category if
the respondent speaks in support of it without any qualifications. It also includes those who
not only support it but who also actually apply it in their organisations. Moderate
importance: comprises views in support of the theme but with certain qualifications or
reservations. Low importance: refers to those views expressing disinterest on the theme or
that it has no significant effect on their activities.
8. Other factors used in the analysis were education level, sector of employment, nature of
business ownership and location of business or organisation.
9. For purposes of the research, accounting is the process of keeping records of one’s economic
activities either for stewardship, accountability or decision making purposes.
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Appendix
Question themes used in semi-structured approach to interviews:
(1) How cultural factors affect management and accounting practices of Solomon Island
business and organisations. Cultural factors include:
.
Social structure in society.
.
Kinship/wantok system.
.
Oral tradition. Accounting and
.
Traditional accounting practices. culture
.
Concepts of trust and loyalty.
.
Accountability.
Note: These six key concepts were selected from an appreciation of the Solomon Islands
traditional society and literature regarding indigenous values in accounting. 259
(2) Western accounting values versus Solomon Island cultural values, particularly the
following:
.
Individualism.
.
Transparency.
.
Profit maximisation.
.
Separation of business entity.
.
Competition.
.
Performance measurement.
. Time value.
Note: These seven elements were drawn from the Anglo-American, neo-classical model
of accounting. Reference was also made to Hofstede’s (1980) cultural elements of
individualism versus collectivism, and to Watts and Zimmerman’s (1990) discussion of
wealth maximization in traditional accounting practice.
About the authors

Abraham Hauriasi undertook his undergraduate studies at universities in Papua New Guinea
and Fiji. On completion of studies he was employed as an accounts trainer with the internal audit
department of the Ministry of Finance in the Solomon Islands government. Later he took up the
post of Internal Auditor with the Anglican Church of Melanesia (CoM) and one year later he was
awarded a scholarship to undertake an MMS at Waikato University. After completing these
studies he rejoined the CoM and was appointed to the post of finance manager. In 2004 he took up
a senior finance post with an EU project that monitors and coordinates all EU-funded projects in
the Solomon Islands. At the completion of the contract in mid-2006 he went to the University of
Waikato on an NZAID scholarship to pursue doctoral studies.
Howard Davey teaches accounting theory, financial accounting and international accounting.
He holds a BA, BBS, MBA (Hons) (Massey) and a PhD (Waikato) He has a background in
government and accounting practice. His research interests are in the areas of external reporting
and financial accounting in general, including non-traditional measures of performance, as well
as taxation and professional issues, and accounting theory. He is a member of the New Zealand
Institute of Chartered Accountants and of the Institute of Chartered Secretaries and
Administrators. Howard Davey is the corresponding author and can be contacted at:
hdavey@waikato.ac.nz
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Pacific Accounting Review

Accounting and culture: The case of Solomon Islands

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into, and interact with, local traditions.

by Anglo-American influences. There have been arguments in the extant international

2. Background to accounting, culture and developing countries

Eggleton, 2004; Tsui, 2001) although there is a growing number of studies on

3. Solomon Islands background

3.1 Political and social organisation

important part of developing this reputation (Hogbin, 1964). Codrington (1972)

3.2 Economic and production system

3.3 Time orientation

234 4. Accounting development in the Solomon Islands

5.1 Participant selection

5.2 Interview analysis

Themes Description Sub-parts

Behavioural Responses concerning the social, political, Forms of accountability

6.1 Behavioural themes

High Moderate Low

By contrast, accountability in modern Solomon Island society was considered highly

individual is contained in order to maintain relationships within the group (C4).

244 6.2 Business/economic themes

from these exchanges. Profit making is discouraged since:

superseded by cultural demands of sharing with relatives and ensuring fair

6.3 Accounting themes

250 6.4 Comparison of the results

Islands society is moving away from its traditional communal emphasis to

Theme Sub-theme Traditional SI society Contemporary SI society

Behavioural Forms of accountability Close knit community Leaders often remote

7.2 Issues for consideration

that it was appropriate to combine the responses from the two.

Journal of Social Economics, Vol. 35 No. 12, pp. 919-29.

Kabutaulaka, T.T. (1998), “Pacific Islands stakeholder participation in development: Solomon

About the authors

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

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