El papel de la cultura

This study notes that IFRS is reputed to be principle based and do not recognise national peculiarities. In other words it appears that International standards do not adequately reflect economic, social or legal realities peculiar to each nation.

Moreover, the standards are one-size-fits-all; micro, small or medium enterprise all must conform to the same standards. Except for some guide lines that IASB is proposing to issue.

It is a truism that the accounting challenges faced by Multinational corporations arose as a result of different countries having different accounting standards resulting from cultural settings, legal, economic and political environments peculiar to each country,hence their struggles to harmonise national standards.

Haskin, Ferris &Selling (2000, p.16) put it succinctly as follows:

…financial reporting practices are a consequence of various contextual factors that include a country’s 1) dominant culture, 2) system of taxation, 3) role of capital market, and 4) business-government relations.

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It goes without saying therefore that the needs of users of accounting information varies from country to country hence the enormity of the challenges in unifying (Harmonization) global accounting standards. Contrary to the basic assumptions of the international standards there are plethora of empirical studies that support the view that accounting practice is influenced by environmental factors. For instance Iyoha (2011) argued that thorough understanding of the environment in which financial reporting occurs is a prerequisite to understanding and appreciating the quality of accounting practice in any country. Furthermore, that no profession in any country is excluded from the influence of changes in the business environment. Because the forces of change inexorably exert influence on the profession, the shape of the competitive landscape changes, old paradigms die and new paradigms emerge and dominate.

What is implied in the preceding assertion is that the interplay of the various factors in the business environment such as the type and stage of economic development, the political and legal status, the regulatory framework in place as well as societal values may influence the nature, purpose, possibilities and limitations of development of accounting profession in the environment and in turn the quality of accounting practice.

The author further buttress his arguments by stating that researchers have identified the reasons for differences in development of accounting professions among countries of the world and the researchers are shown in the following

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parenthesis (Mueller,1967; Harrison & Mckinnon, 1986; Gray, 1988;, Choi &

Mueller, 1992; Radebaugh, Gray &Black, 2006; Lawrence, 1996; Hassab, Epps,

& Said, 2001).

We noted further that Nigerian Accounting Standard Board was formed in 1982 on the initiative of Institute of Chartered Accountants of Nigeria when it became obvious that many of the International Accounting Standards were not of immediate relevance to Nigerian accounting needs (Wallace, 1988). In other words, in Nigeria global standards preceded the setting of national standards and the global standards did not completely meet the needs of user of accounting information in Nigeria.

Therefore, the recent euphoria on adoption of global standards in Nigerian financial sector appears to be worrisome as it has brought to the fore the issue of contextual relevance of accounting standards because international differences in accounting standards arose from varying economic, legal, social, and environmental peculiarities of different countries as stated above. The worries appear to be whether or not such peculiarities are no more significant. This study notes that proponents of standards harmonisation have averred that convergence of standards amongst nations is incontrovertible. Obazee (2008) succinctly posited that the globalisation of capital markets is an irreversible process, and that there are many potential benefits to be gained from mutually recognised and respected international accounting standards. That common

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standard cut the costs of doing business across borders by reducing the need for supplementary information.

Non-proponents on the other hand argue that the above assertion may not in any way justify enforcement of internationally harmonised standards willy-nilly on any organisation whether or not it is a financial institution because the needs of users of accounting information varies from country to country hence the enormity of the challenges in unifying (Harmonization) global accounting standards.

Suffice to state here that Sidney et al (1982) postulated thatto understand the nature of accounting principles, it may be necessary to contrast them with principles in physics and mathematics. That in physics and other natural sciences, a principle is a description derived by repeated experiments and testing of the relationship between two physical object or events. The criterion for evaluating a principle in physics is the degree to which the predictions indicated by the principle correspond with physically observed phenomena (empirical evidence). According to them in mathematics, a principle is a description based on logical reasoning of the relationship between sets of mathematics symbols. The criterion for evaluating a principle in mathematics is the internal consistency of the principle with, the accepted set of definitions and axioms. They stated that Accounting principles are descriptions of the manner in which particular transactions and events are measured and then reported in a

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set of financial statements. Unlike those in the physical sciences, principles in accounting do not naturally exist and awaiting discovery. Unlike mathematics, accounting has no structured definitions and concepts that can be rigorously and unambiguously used in developing accounting principles acceptable to preparers and users of financial statements. Accounting Principles are developed on a formulation through deductive or inductive process.

Therefore, it may be correct to assert that accounting principles are environmental dependent and evolve over time. Put differently, what is good and acceptable in one environment may not be suitable for another environment.

Non-universality of principles is therefore a serious challenge to un-wholesome adoption of IFRS which attempts to harmonise national standards.

Another critical environmental factor which standards ought to give outmost consideration to is the culture of the people of which corruption is a subset, for instance, Iyoha (2011) opined that the problem of corruption in Nigeria and its influence on accounting practices can be traced to the various changes in its socio-political and economic environment. The author postulated that Nigeria has had its own transformation since independence. That these changes include experimentation with different styles of governmentand military dictatorship of different kinds, different economic experiences and changing fortunes of the people-from poverty, through civil war, affluence, to crippling depression and

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many ethnic tensions. In his view, this transformation within the Nigeria economy has significantly influenced the accounting practice in many respects.

Economic conditions are also major determinant in the development of a country’s accounting profession. As economies develop, it is argued, the social function of accounting to measure and communicate economic data becomes important (Belkaoui, 1985 and Hassab, Epps& Said, 2001). Similarly, Zeghal and Mhedhbi (2006) argued that in countries where the level of economic growth is relatively high, ―the social function of accountancy as an instrument of measurement and communication is of considerable importance.‖ These arguments are based on the premise that ―the more advanced levels of economic development are associated with relatively high levels of disclosure and reporting practices. In countries with extremely low levels of economic development, there is very little economic activity and accordingly, the accounting profession is highly undeveloped‖ (Arpan &Radbaugh, 1985).

In the same vein the income tax laws of countries have influence on accounting practice and development. Belkauoi (1985), asserts that the tax system of each country defines directly and most frequently the conduct of business and hence the practice of accounting. The author concludes that subject to the constraints imposed by company law, tax law has a major influence on accounting practice.

That many companies follow aspects of the tax laws rather than accounting principles in their measurement of periodic accounting profit and justify a

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particular practice according to whether it is permitted by tax law rather than accounting principle.

The sophistication of education of accountants is also critical to accountants’

ability to develop and perform their duties and responsibilities. Hence education can be said to be the pillar for modern complex accounting system. This view is in tandem with the case of crazy eddy cited earlier.