Abstract
Theoretical and empirical evidence demonstrates that accounting choices are strongly influenced by national and organisational cultures. Following the discussion of previous chapter we argue that the family business constitutes a very flourishing field which is interesting to investigate particularly in terms of the role played by the culture on accounting choices. Moving from the first anthropological definitions of culture and grounding on the premises of prior literature, we develop a conceptual model on the influences of accounting and family cultures on accounting decisions. This chapter also considers accounting harmonisation and the literature on earnings management and culture. Finally, as in the previous part of the book, we close the chapter by presenting challenges and opportunities for future research, in particular on the interplay amongst family firms, accounting choices and culture.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
The data were retrieved from https://scholar.google.it/on October 1st, 2017.
- 2.
For a comment on Gianni Agnelli’s style read amongst others: https://www.gentlemansgazette.com/gianni-agnelli-style-gentleman/.
- 3.
- 4.
Specifically, following Astrachan et al. (2002), the questionnaire relating to the Culture sub-scale focuses on the responses about: (1) The family influence on the business; (2) The family members level of values sharing; (3) The family and business level of values sharing; (4) The effort family members are willing to put in in order to help the family business to be successful; (5) The family support of the family business in discussions with friends, employees, and other family members; (6) The loyalty to the family business; (7) Compatibility of personal values with those of the business; (8) The pride of telling others that they are part of the family business; (9) The long-term participation with the family business; (10) The level of agreement with the family business goals, plans and policies; (11) The interest in the fate of the family business; (12) The impact on the life of the involvement with the family business; (13) The understanding and support of the family’s decisions regarding the future of the family business.
References
Albers-Miller ND, Gelb BD (1996) Business advertising appeals as a mirror of cultural dimensions: a study of eleven countries. J Advert 25(4):57–70. https://doi.org/10.1080/00913367.1996.10673512
Ali A, Chen TY, Radhakrishnan S (2007) Corporate disclosures by family firms. J Account Econ 44(1):238–286
Allegrini M, Azzali S, Gaetano A, Pizzo M, Quagli A (2006) Principi contabili internazionali. G. Giappichelli Editore, Torino
Anselmi L (1999) Aziende familiari di successo in Toscana, vol 140. FrancoAngeli, Milan
Aronoff C (2004) Self-perpetuation family organization built on values: necessary condition for long-term family business survival. Fam Bus Rev 17(1):55–59
Astrachan JH, Klein SB, Smyrnios KX (2002) The F-PEC scale of family influence: a proposal for solving the family business definition problem. Fam Bus Rev XV(1):45–58
Barney J (1991) Firm resources and sustained competitive advantage. J Manag 17(1):99–120
Barua A, Davidson LF, Rama DV, Thiruvadi S (2010) CFO gender and accruals quality. Account Horiz 24(1):25–39. https://doi.org/10.2308/acch.2010.24.1.25
Baskerville RF (2003) Hofstede never studied culture. Account Organ Soc 28(1):1–14
Beattie V, McInnes B, Pierpoint J (2008) The management commentary: comparing narrative outcomes from alternative regulatory regimes. Institute of Chartered Accountants in England and Wales
Bennett J (1954) Interdisciplinary research and the concept of culture. Am Anthropol 56(2):169–179
Bhalla A, Lampel J, Henderson S, Watkins D (2009) Exploring alternative strategic management paradigms in high-growth ethnic and non-ethnic family firms. Small Bus Econ 32(1):77–94. https://doi.org/10.1007/s11187-007-9064-z
Birukou A, Blanzieri E, Giorgini P, Giunchiglia F (2013) A formal definition of culture. Models for intercultural collaboration and negotiation. Springer, Netherlands, pp 1–26
Boubakri N, Saffar W (2016) Culture and externally financed firm growth. J Corp Finance 41:502–520. https://doi.org/10.1016/j.jcorpfin.2016.04.003
Braun GP, Rodriguez RP Jr (2008) Earnings management and accounting values: a test of Gray (1988). J Int Account Res 7(2):1–23
Callen JL, Morel M, Richardson G (2011) Do culture and religion mitigate earnings management? Evidence from a cross-country analysis. Int J Discl Gov 8(2):103–121. https://doi.org/10.1057/jdg.2010.31
Carlock R, Ward J (2001) Strategic planning for the family business: parallel planning to unify the family and business. Springer, Netherlands
Carlock RS, Ward JL (2010) When family businesses are best. Springer, Netherlands
Cascino S, Pugliese A, Mussolino D, Sansone C (2010) The influence of family ownership on the quality of accounting information. Fam Bus Rev 23(3):246–265. https://doi.org/10.1177/0894486510374302
Chanchani S, Willett R (2004) An empirical assessment of Gray’s accounting value constructs. Int J Account 39(2):125–154. https://doi.org/10.1016/j.intacc.2004.02.003
Chapman CS, Cooper DJ, Miller P (2009) Linking accounting, organizations, and institutions. Accounting, Organizations and Institutions, Oxford University Press, Oxford, pp 1–29
Chen S, Chen X, Cheng Q (2014) Conservatism and equity ownership of the founding family. Eur Account Rev 23(3):403–430. https://doi.org/10.1080/09638180.2013.814978
Chen S, Chen XIA, Cheng Q (2008) Do family firms provide more or less voluntary disclosure? J Account Res 46(3):499–536
Ciambotti M (2001) L’influenza dei fattori culturali sul controllo manageriale: un quadro d’analisi tra aspettative e conferme empiriche. LINT, Trieste
Cieslewicz JK (2014) Relationships between national economic culture, institutions, and accounting: implications for IFRS. Crit Perspect Account 25(6):511–528. https://doi.org/10.1016/j.cpa.2013.03.006
Cohen JR, Pant LW, Sharp DJ (1992) Cultural and socioeconomic constraints on international codes of ethics: lessons from accounting. J Bus Ethics 11(9):687–700
D’Arcy A (2001) Accounting classification and the international harmonisation debate—an empirical investigation. Account Organ Soc 26(4):327–349
Denison D (1984) Bringing corporate culture to the bottom line. Org Dyn 13(2):5–22
Denison D, Lief C, Ward JL (2004) Culture in family-owned enterprises: recognizing and leveraging unique strengths. Fam Bus Rev 17(1):61–70
Desender KA, Castro CE, Escamilla De León SA (2011) Earnings management and cultural values. Am J Econ Sociol 70(3):639–670
Distelberg B, Sorenson RL (2009) Updating systems concepts in family businesses a focus on values, resource flows, and adaptability. Fam Bus Rev 22(1):65–81
Doupnik TS (2008) Influence of culture on earnings management: a note. Abacus 44(3):317–340. https://doi.org/10.1111/j.1467-6281.2008.00265.x
Doupnik TS, Riccio EL (2006) The influence of conservatism and secrecy on the interpretation of verbal probability expressions in the Anglo and Latin cultural areas. Int J Account 41(3):237–261
Doupnik TS, Salter SB (1993) An empirical test of a judgmental international classification of financial reporting practices. J Int Bus Stud 24(1):41–60
Doupnik TS, Tsakumis GT (2004) A critical review of tests of Gray’s theory of cultural relevance and suggestions for future research. J Account Lit 23(1):1–48
Dyer WG (1988) Culture and continuity in family firms. Fam Bus Rev 1(1):37–50
Ferramosca S, Allegrini M (2017) La proprietà familiare come determinante della qualità degli utili. Evidenze empiriche della relazione tra generazione e income smoothing. In: D’Onza G (ed) Assetti di governance, sistemi di controllo e di risk management nelle aziende familiari. G. Giappichelli Editore, Torino, pp 1–28
Frijns B, Dodd O, Cimerova H (2016) The impact of cultural diversity in corporate boards on firm performance. J Corp Finance 41:521–541. https://doi.org/10.1016/j.jcorpfin.2016.07.014
Gallo MA (2004) The family business and its social responsibilities. Fam Bus Rev 17(2):135–149
Gary DP (1929) The developing study of culture. In: Lundberg GA et al (eds) Trends in American sociology, New York
Geiger M, Van Der Laan Smith J (2010) The effect of institutional and cultural factors on the perceptions of earnings management. J Int Account Res 9(2):21–43
Geiger MA, O’Connell BT, Clikeman PM, Ochoa E, Witkowski K, Basioudis I (2006) Perceptions of earnings management: the effects of national culture. Adv Int Account 19:175–199. https://doi.org/10.1016/s0897-3660(06)19007-8
Gernon H, Wallace RO (1995) International accounting research: a review of its ecology, contending theories and methodologies. J Account lit 14:54–106
Ghio A, Verona R (2015) Accounting harmonization in the BRIC countries: a common path? Account Forum 39(2):121–139. https://doi.org/10.1016/j.accfor.2015.02.001
Gray SJ (1988) Towards a theory of cultural influence on the development of accounting systems internationally. Abacus 24(1):1–15
Gray SJ, Kang T, Lin Z, Tang Q (2015) Earnings management in Europe post IFRS: do cultural influences persist? Manage Int Rev 55(6):827–856. https://doi.org/10.1007/s11575-015-0254-7
Greco G, Ferramosca S, Marchi L (2015) Governance codes and types of issuer: a global study. Int J Bus Gov Ethics 10(1):28–56
Guan L, Pourjalali H (2010) Effect of cultural environmental and accounting regulation on earnings management: a multiple year-country analysis. Asia Pac J Account Econ 17(2):99–127. https://doi.org/10.1080/16081625.2010.9720856
Guan L, Pourjalali H, Sengupta P, Teruya J (2005) Effect of cultural environment on earnings manipulation: a five Asia-Pacific country analysis. Multinational Bus Rev 13(2):23–41
Guilford J (1959) Personality. McGraw Hill, New York
Gupta A, Ferguson J (1992) Beyond “culture”: Space, identity, and the politics of difference. Cult Anthropol 7(1):6–23
Hail L, Leuz C, Wysocki P (2010a) Global accounting convergence and the potential adoption of IFRS by the U.S. (Part I): conceptual underpinnings and economic analysis. Account Horiz 24(3):355–394. https://doi.org/10.2308/acch.2010.24.3.355
Hail L, Leuz C, Wysocki P (2010b) Global accounting convergence and the potential adoption of IFRS by the U.S. (Part II): political factors and future scenarios for U.S. accounting standards. Account Horiz 24(4):567–588. https://doi.org/10.2308/acch.2010.24.4.567
Han S, Kang T, Salter S, Yoo YK (2010) A cross-country study on the effects of national culture on earnings management. J Int Bus Stud 41(1):123–141. https://doi.org/10.1057/jibs.2008.78
Hofstede G (1980) Culture and organizations. Int Stud Manage Organ 10(4):15–41. https://doi.org/10.1080/00208825.1980.11656300
Hofstede G (1983) National cultures in four dimensions: a research-based theory of cultural differences among nations. Int Stud Manage Organ 13(1–2):46–74. https://doi.org/10.1080/00208825.1983.11656358
Hofstede G (1984) National cultures and corporate cultures: communication between cultures, vol 5. Wadsworth, Belmont, CA
Hofstede G (2001) Culture’s consequences: comparing values, behaviors, institutions and organizations across nations. Sage, California
Hofstede G (2003) What is culture? A reply to Baskerville. Account Organ Soc 28(7–8):811–813. https://doi.org/10.1016/s0361-3682(03)00018-7
Hofstede G, Hofstede G, Minkov M (2010) Cultures and organizations, software of the mind. Intercultural cooperation and its importance for survival. McGraw Hill, New York
Hofstede G, Neuijen B, Ohayv DD, Sanders G (1990) Measuring organizational cultures: a qualitative and quantitative study across twenty cases. Adm Sci Q 35(2):286–316
Holt DT, Rutherford MW, Kuratko DF (2007) F-PEC Scale of family influence: a refinement. Acad Manage 1:1–6
Hope OK (2003) Firm-level disclosures and the relative roles of culture and legal origin. J Int Finan Manage Account 14(3):218–248
Kanagaretnam K, Lim CY, Lobo GJ (2011) Effects of national culture on earnings quality of banks. J Int Bus Stud 42(6):853–874. https://doi.org/10.1057/jibs.2011.26
Kanagaretnam K, Lim CY, Lobo GJ (2014) Influence of national culture on accounting conservatism and risk-taking in the banking industry. Account Rev 89(3):1115–1149. https://doi.org/10.2308/accr-50682
Keesing FM (1958) Cultural anthropology. Rinehart & Company. Inc, New York
Khalifa M, Othman HB, Hussainey K (2016) Temporal variation and cross-sectional differences of accounting conservatism in emerging countries. Int J Account Audit Perform Eval 12(1):45–69
King MR, Santor E (2008) Family values: ownership structure, performance and capital structure of Canadian firms. J Bank Finance 32(11):2423–2432. https://doi.org/10.1016/j.jbankfin.2008.02.002
Klein SB, Astrachan JH, Smyrnios KX (2005) The F-PEC scale of family influence: construction, validation, and further implication for theory. Entrepreneurship Theory Pract 29(3):321–339
Kluckhohn C (1951) Values and values orientations in the theory of action: an exploration in definition and classification. In: Shils E, Parsons T (eds) Toward a general theory of action. Harvard University Press, Cambridge
Kluckhohn C, Kelly WH (1945) The concept of culture. In: Linton R (ed) The science of man in the world crisis. Columbia University Press, NY, pp 78–106
Koiranen M (2002) Over 100 years of age but still entrepreneurially active in business: exploring the values and family characteristics of old Finnish family firms. Fam Bus Rev 15(3):175–187
Krishnan GV, Parsons LM (2007) Getting to the bottom line: an exploration of gender and earnings quality. J Bus Ethics 78(1–2):65–76. https://doi.org/10.1007/s10551-006-9314-z
Kroeber AL, Kluckhohn C (1952) Culture: a critical review of concepts and definitions. Papers Peabody Museum of Archaeology & Ethnology, Harvard University, Cambridge
Kroeber AL, Parsons T (1958) The concepts of culture and of social system. Am Sociol Rev 23(5):582–583
Kvaal E, Nobes C (2010) International differences in IFRS policy choice: a research note. Account Bus Res 40(2):173–187. https://doi.org/10.1080/00014788.2010.9663390
Kvaal E, Nobes C (2012) IFRS policy changes and the continuation of national patterns of IFRS practice. Eur Account Rev 21(2):343–371. https://doi.org/10.1080/09638180.2011.611236
La Porta R, Lopez-de-Silanes F, Shleifer A, Vishny R (2000) Investor protection and corporate governance. J Finance Econ 58(1):3–27
Lansberg IS (1983) Managing human resources in family firms: the problem of institutional overlap. Org Dyn 12(1):39–46
Licht AN, Goldschmidt C, Schwartz SH (2005) Culture, law, and corporate governance. Int Rev Law Econ 25(2):229–255. https://doi.org/10.1016/j.irle.2005.06.005
Linton R (1955) Tree of culture. Knopf, New York
Lussier RN, Sonfield MC (2006) The effect of family business size as firms grow: a USA-France comparison. J Small Bus Enterp Dev 13(3):314–325
Martin G, Campbell JT, Gomez-Mejia L (2016) Family control, socioemotional wealth and earnings management in publicly traded firms. J Bus Ethics 133(3):453–469. https://doi.org/10.1007/s10551-014-2403-5
Martin WL, Lumpkin G (2003) From entrepreneurial orientation to family orientation: generational differences in the management of family businesses. In: Frontiers of entrepreneurship research: proceedings of the 23rd annual entrepreneurship research conference, pp 309–321
Nabar S, Boonlert-U-Thai KK (2007) Earnings management, investor protection, and national culture. J Int Account Res 6(2):35–54
Nair RD, Frank WG (1980) The impact of disclosure and measurement practices on international accounting classifications. Account Rev 55(3):426–450
Nobes C (2008) Accounting classification in the IFRS era. Aust Account Rev 18(3):191–198. https://doi.org/10.1111/j.1835-2561.2008.0024.x
Nobes C (2011) IFRS practices and the persistence of accounting system classification. Abacus 47(3):267–283. https://doi.org/10.1111/j.1467-6281.2011.00341.x
Nobes C, Parker RH (2010) Comparative international accounting. Pearson Education, London
Nobes CW (1983) A judgemental international classification of financial reporting practices. J Bus Finance Account 10(1):1–19
Payne GT, Brigham KH, Broberg JC, Moss TW, Short JC (2011) Organizational virtue orientation and family firms. Bus Ethics Q 21(02):257–285. https://doi.org/10.5840/beq201121216
Pazzaglia F, Mengoli S, Sapienza E (2013) Earnings quality in acquired and nonacquired family firms: a socioemotional wealth perspective. Family Bus Rev 26(4):374–386. https://doi.org/10.1177/0894486513486343
Petersen JA, Kushwaha T, Kumar V (2014) Marketing communication strategies and consumer financial decision making: the role of national culture. J Mark 79(1):44–63. https://doi.org/10.1509/jm.13.0479
Razzaque RMR, Ali MJ, Mather PR (2016) Real earnings management in family firms: evidence from an emerging economy. Pac Finance J 40:237–250. https://doi.org/10.1016/j.pacfin.2015.12.005
Riahi-Belkaoui A (1997) The nature and determinants of disclosure adequacy: an international perspective. Quorum Books, Westport
Ringov D, Lenssen G, Zollo M (2007) The impact of national culture on corporate social performance. Corp Governance Int J Bus Soc 7(4):476–485. https://doi.org/10.1108/14720700710820551
Rokeach M (1972) Organization and change within value-attitude systems. Beliefs, attitudes, and values. Jossey-Bass Inc, San Francisco, CA, pp 156–178
Rossetti S, Verona R (2017) International differences in IFRS policy choice and the persistence of accounting classification: the case of China. Int J Bus Manage 12(2):27. https://doi.org/10.5539/ijbm.v12n2p27
Salter SB, Kang T, Gotti G, Doupnik TS (2013) The role of social values, accounting values and institutions in determining accounting conservatism. Manage Int Rev 53(4):607–632. https://doi.org/10.1007/s11575-012-0152-1
Salter SB, Lewis PA (2011) Shades of Gray: an empirical examination of Gray’s model of culture and income measurement practices using 20-F data. Adv Account 27(1):132–142. https://doi.org/10.1016/j.adiac.2010.08.008
Salter SB, Niswander F (1995) Cultural influence on the development of accounting systems internationally: a test of Gray’s [1988] theory. J Int Bus Stud 26(2):379–397
Sánchez Marín G, Carrasco Hernández AJ, Danvila del Valle I, Sastre Castillo MÁ (2016) Organizational culture and family business: a configurational approach. Eur J Fam Bus 6(2):99–107. https://doi.org/10.1016/j.ejfb.2017.05.002
Schultz JJ, Lopez TJ (2001) The impact of national influence on accounting estimates: implications for international accounting standard-setters. Int J Account 36(3):271–290
Seah SSY, Tarca A (2013) An investigation of international comparability of management discussion and analysis reports, SSRN
Srinidhi BIN, Gul FA, Tsui J (2011) Female directors and earnings quality. Contemp Account Res 28(5):1610–1644. https://doi.org/10.1111/j.1911-3846.2011.01071.x
Stewart A, Hitt MA (2012) Why can’t a family business be more like a nonfamily business? Fam Bus Rev 25(1):58–86. https://doi.org/10.1177/0894486511421665
Stoica M, Pistrui D (2006) Dilemma in family-owned businesses: business commitment versus family commitment. Is success changing the balance? J Bus Entrepreneurship 18(2):49
Tagiuri R, Davis J (1996) Bivalent attributes of the family firm. Fam Bus Rev 9(2):199–208
Tàpies J, Fernández Moya M (2012) Values and longevity in family business: evidence from a cross-cultural analysis. J Fam Bus Manage 2(2):130–146. https://doi.org/10.1108/20436231211261871
Thomas AS, Mueller SL (2000) A case for comparative entrepreneurship: assessing the relevance of culture. J Int Bus Stud 31(2):287–301
Triandis HC (2004) The many dimensions of culture. Acad Manage Executive 18(1):88–93
Tsakumis GT (2007) The influence of culture on accountants’ application of financial reporting rules. Abacus 43(1):27–48. https://doi.org/10.1111/j.1467-6281.2007.00216.x
Tylor EB (1871) Primitive culture: researches into the development of mythology, philosophy, religion, art, and custom, vol 2. J. Murray, London
Vallejo MC (2008) Is the culture of family firms really different? A value-based model for its survival through generations. J Bus Ethics 81(2):261–279. https://doi.org/10.1007/s10551-007-9493-2
Vieira EFS (2016) Earnings management in public family firms under economic adversity. Aust Account Rev 26(2):190–207. https://doi.org/10.1111/auar.12096
Vitell SJ, Nwachukwu SL, Barnes JH (1993) The effects of culture on ethical decision-making: an application of Hofstede’s typology. J Bus Ethics 12(10):753–760
Wang D (2006) Founding family ownership and earnings quality. J Account Res 44(3):619–656. https://doi.org/10.1111/j.1475-679X.2006.00213.x
Weiss G (1973) A scientific concept of culture. Am Anthropol 75(5):1376–1413
White L (1959) The concept of culture. Am Anthropol 61(2):227–251
Whittington G (2008) Harmonisation or discord? The critical role of the IASB conceptual framework review. J Account Public Policy 27(6):495–502. https://doi.org/10.1016/j.jaccpubpol.2008.09.006
Williams M (1986) Culture. Society Today. Macmillan Education, London, UK, pp 26–31. https://doi.org/10.1007/978-1-349-08845-4_6
Zheng X, El Ghoul S, Guedhami O, Kwok CCY (2012) National culture and corporate debt maturity. J Bank Finance 36(2):468–488. https://doi.org/10.1016/j.jbankfin.2011.08.004
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2018 Springer International Publishing AG
About this chapter
Cite this chapter
Ferramosca, S., Ghio, A. (2018). The Relationship Between Accounting Choice and Family Business: What Is the Role of Culture?. In: Accounting Choices in Family Firms. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-319-73588-7_6
Download citation
DOI: https://doi.org/10.1007/978-3-319-73588-7_6
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-73587-0
Online ISBN: 978-3-319-73588-7
eBook Packages: Business and ManagementBusiness and Management (R0)