Culture and Accounting Practices in Indonesia
Journal Title: Asian Journal of Economics, Business and Accounting - Year 2017, Vol 4, Issue 4
Abstract
This article discusses the cultural impacts on the accounting values and practices in the context of Indonesia. Hofstede’s cultural dimensions (individualism versus collectivism, large versus small power distance, strong versus weak uncertainty avoidance and masculinity versus femininity) with Gray’s accounting values (professionalism versus statutory control, uniformity versus flexibility, conservatism versus optimism and secrecy versus transparency) are applied to Indonesia’s accounting systems and practices. The presented article showed that there has been small progress in enabling auditors or accountants to exercise their individual professional judgments. As a result of the capitalist system, with its heavy government intervention in the practices of the accounting profession, the professionalism in the accounting sector is still weak. This in turn influences the disclosure of accounting information. Indonesia’s collectivistically-oriented society thus has caused a lower level of professionalism where management, including accountants and auditors of the firms, find it difficult to exercise their professional judgments. This then has a direct impact on the uniformity of accounting practices as well as on the disclosure of accounting information. The strong avoidance of uncertainty in Indonesia results in the conservatism of accounting practices, where the use of the historical cost of asset valuation, recognition of internally-generated assets and amortization of those intangible assets are largely practised. There is a strongly masculine influence in the society, which causes secrecy, thus restricts the disclosure of accounting information with the intent of avoiding competition among the society.
Authors and Affiliations
Jhon Urasti Blesia
Keywords
Related Articles
- EP ID EP338549
- DOI 10.9734/AJEBA/2017/36846
- Views 60
- Downloads 0
The Impact of Audit Committee Characteristics on Earnings Management in the Pre- and Post- Bahraini Corporate Governance Code 2011
Aims: This study tends to measure the effectiveness of the Bahraini corporate governance code (BCGC) 2011 on curbing earnings management practices by using audit committee (AC) characteristics in the pre- and post- BCGC...
Money Demand and Supply under Market Disequilibrium: Evidence from Nigeria
This paper argues that for economies that have structural rigidities and irregularities, the received knowledge of equilibrium in the demand and supply of money should be interrogated. The paper proposes a third variable...
Determinants of Investment in Non-current Assets in Small and Medium Manufacturing Enterprises in Nigeria
The study examines the determinants of non-current assets acquisition in Small and Medium Scale Enterprises (SMEs) in Ondo state, Nigeria. Ondo state was selected for the study because it is one of the developing states...
Financial Information Disclosure and the Reliability of Fair Value Estimations in Published Financial Statements: Evidence from Real Estate Sector in Nigeria
The inadequacy of historical cost measurement has been unto capture current market information and conditions have given rise to the increased use of fair value measurement. However, there has been a controversy as to wh...
Awareness and Perception of Bank Customers towards Green Banking in Sylhet District of Bangladesh
This paper explores the awareness and perception of bank customers about the green banking practices of commercial banks of Sylhet district. Primary data was collected from the customers in the month of January and Febru...