Week 10 lecture handout - ACCG835 International Accounting...

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1ACCG835International AccountingWeek 10 – Financial Reporting in Selected Countries – Japan and Chinaby Stephen Haswell
2Assigning values to Hofstede’s dataTo make the Gray model workable, we must assign the Hofstede data to a high or low value. (Note: the five scales do not have the same ranges or averages.)Long80Short29Short/LongHigh95High62MasculinityHigh92Low46UncertaintyLow46High91IndividualityHigh54Low40PowerUSAJAPAN
3LINKING SOCIETAL and ACCOUNTING VALUES: Japan actualsAccounting ValuesPDIDVUAIMASCLTOProfessional v Statutory ControlUniformityv FlexibilityConservatismv OptimismSecrecyv Transparency54469295LongHIGHLOWHIGHHIGHLONGHIGHLOWHIGHLOWHIGHHIGHLONGHIGHLOWHIGHHIGHLONG
4Summary of theoretical prediction for JapanThe model does not seem as strong as for the USA. We do not have 100% correlation of the cells, but the relationships still seem strong enough to predict the following: We expect to find;statutory control model of authority and enforcement, uniformity in accounting techniques.conservative values for assets and profits.secrecy in information disclosure.Seems to be a problem with the masculinity variable (high), which needs to be explained.
5Culture & Business EnvironmentTraditional society. Interdependence of group and individual.Personal relationships important. Powerful families and stable companies.Importance of banks. High degree of debt finance. Lower importance of shareholders.Business culture a mixture of domestic and foreign. German and US influential.
6PlayersMinistry of Justice (MoJ):Regulates Commercial Code, applies to all companies (about 1 million). Requirement for annual reporting. Audit requirement for large companies.Compared with USA, Japan has more uniformity.Large, listed companies also report to MoF, i.e. have duplicate reporting requirements.
7Players (cont)Ministry of Finance (MoF) most powerful player. Financial influence over whole economy.Regulates Securities Exchange (SE) Law, applies to 1800 listed companies. Similar to US SEC disclosure and auditing laws, but less content.Tax bureau and tax law are central to accounting.
8Players – see pages 232 - 233JICPA, professional body:small (13,000 members), weak influence. Regulated by MOF.Activities restricted to audit and tax. Not popular with companies. Auditors tend not to question accounts too much.Top company executives not usually accountants nor members of JICPA.Business Accounting Deliberation Council – now Business Accounting Council, gives accounting standard advice.Accounting Standards Board of Japan, new player – sole responsibility for developing accounting standards, gives advice on policy formulation.
9Historical perspective – ZaibatsuCorporate industrial form came to Japan in 1899.

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Term
Three
Professor
N/A
Tags
Accounting, japan, International Financial Reporting Standards, Keiretsu, Economy of Japan

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