How is the theory of national culture relevant to the way in which International Financial Reporting Standards will be used in different countries?

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National Culture and International Financial Reporting Standards

Effective implementation of International Financial Reporting Standards (IFRSs ) in different countries is not an easy task . Poor infrastructures as well as internal influences are one the causes that have lead to partial implementation of IFRSs . Differences in national culture in accounting have a big role to play . Religion also plays a big role . For instance , Islamic religion is against paying or receiving interest (Deegan 2009

Various national cultures have different opinions about recognition and measurement issues which

are sometimes influenced by political forces Accounting bodies in various countries plays a big role in ensuring implementation of accounting standards . E .g , in USA there is General Accepted Accounting Principles (GAAP . Sarbanes-Oxley act also has a big role to play in ensuring desirable accounting reporting . Financial Accounting Standards Board (FASB ) is the regulatory accounting regulatory body . Standards of IASB are based on `principles ' while those of FASB are based on `rules . In other words , a principle based standards imply that an account should employ basic principles to ensure accurate and true financial statements . Rule based standards on the other hand state that , accurate and true financial reporting will be attained by following specific rules . The argument is that principle rule may not be appropriate since it may encourage accountant to rely so much on judgment . Rule based standards may encourage accountants to unearth loopholes in the rules . In Australia the Australian Accounting Standards Board is the board concerned with developing...