A comparative study into the effectiveness of corporate reporting governance dimensions in reducing inter-company disclosure variation: the challenges facing international accounting standards-setters

Abstract

Despite efforts to harmonise international accounting frameworks over the past 20 years, empirical enquiry into its effect on accounting practice has yielded results indicative of little success. Arguably, the linkage between culture, Generally Accepted Accounting Principles, corporate reporting governance as a mechanism of cultural control, and disclosure practice has been clouded by research efforts which continually misused traditional definitions of culture as societal values alone. To that end prior research has shown that widespread variation in accounting disclosure practice exists, and more significantly remains unexplained even within countries exhibiting similar societal values. This paper has elucidated upon the above defect as it applies to international accounting generally by operationalising and with greater rigour testing the relationship between Lanis' coefficient of corporate reporting governance, societal values, GAAP and disclosure practices. In doing so, international accounting in general and harmorusation in particular will be provided with an adequate framework for establishing the linkage between societal culture and disclosure practices; hence aiding in harmonisation policy development.