Cultural Influence on the Development of Accounting Systems Internationally: A Test of Gray's [1988] Theory

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This paper attempts to test the theory developed by Gray [1988] linking accounting values and systems with Hofstede's [1980] cultural constructs. Based on data from twenty-nine countries, it finds that while Gray's [1988] model has statistically significant explanatory power, it is best at explaining actual financial reporting practices and is relatively weak in explaining extant professional and regulatory structures from a cultural base. This paper further finds that both the development of financial markets and levels of taxation enhance the explanations offered by Gray [1988].

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*Stephen B. Salter is Assistant Professor of Accounting at Texas A&M University. He earned his Ph.D. at the University of South Carolina. His current research interest focuses on the role of cross-national differences in culture as they impact on accounting and control.

**Frederick Niswander is Assistant Professor of Accounting at East Carolina University. He earned his Ph.D. at Texas A&M University. His research focuses on accounting issues pertaining to international and domestic financial institutions.

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Salter, S., Niswander, F. Cultural Influence on the Development of Accounting Systems Internationally: A Test of Gray's [1988] Theory. J Int Bus Stud 26, 379–397 (1995). https://doi.org/10.1057/palgrave.jibs.8490179

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