Cultural Influence On The Characteristics Of Accounting Values In The United States And Japan

The present research, on the basis of Hofstede's theory of cultural dimensions, focuses on exploring cultural influence on accounting values. Through the analysis of the respective characteristics of accounting systems in the United States and Japan, the author tries to sum up the different accounting values existing in these two countries and verify the "accounting values" hypothesis which was proposed by S.J.Gray.An accounting system is to some degree influenced by its culture. Accounting systems are different since the accounting standard setting in each country is based on its culture, politics as well as economy. Accounting systems vary greatly from country to country, because they are subject to different cultures. On the basis of Hofstede's theory of cultural dimensions, the author tries to analyze the linkage between the characteristics of accounting values and its culture. Hofstede's theory of cultural dimensions includes individualism and collectivism, small and large power distance, strong and weak uncertainty avoidance, masculinity and femininity. S.J. Gray'has developed the "accounting values" hypothesis which indicates the cultural influence on the preference of different accounting treatments. The accounting values are composed of professionalism and statutory control in accounting regulation, uniformity and flexibility in accounting standard setting, conservatism and optimism in accounting measurement as well as secrecy and transparency in accounting disclosure.A number of scholars are focusing on the research of cultural theories and accounting systems respectively. With respect to cultural study, scholars have contributed greatly to the formation of cultural differences and the reasons for their existence. In the aspect of accounting study, quite a lot of historical studies have been based oh accounting theory and its development in various ways. Many of them are concerned with the ultimate function of accounting process, while some others mainly focus on the classification of accounting system.The United States, referred to as the "melting pot", is the largest economy in the world and obtains large multinational corporations more than any other nations. It is characterized with freedom, democracy and equal right. Japan is the second-biggest economy in the world and is also home to many of the world's largest businesses. It is characterized with tradition, conservatism as well as social hierarchy. Their characteristics of accounting system are different since the cultures in these two countries are different. It is significant for us to demonstrate cultural influences on characteristics of accounting system through comparative study between American accounting system and Japanese one, and verify S.J. Gray's "accounting values" hypothesis.