Question 1

The term "Class A Accounting" as it is used by the researcher Christopher Nobes refers to:

Accepted Answer

"Class A Accounting" refers to accounting systems that primarily serve external shareholders, as opposed to "Class B Accounting" which primarily serves management.

Question 2

According to Gray's framework for accounting system development, which of the following is directly affected by ecological influences, such as geography, demography, and technology?

Accepted Answer

The answer of According to Gray's framework for accounting system...

Question 3

What term is used to describe accounting standards that encourage risk-taking in financial reporting?

Accepted Answer

Optimism refers to accounting standards that allow for a more optimistic approach to financial reporting, potentially encouraging risk-taking.

Question 4

What does "transparency" mean in accounting?

Accepted Answer

Transparency in accounting refers to the principle of making financial information and reports easily available and understandable to anyone who wishes to access them. It involves providing clear and concise information about a company's financial performance, including its revenues, expenses, assets, liabilities, and cash flows, without hiding anything. This openness is important for investors, creditors, and other stakeholders who rely on financial information to make informed decisions about a company's future prospects.

Question 5

What term is used to refer to a cultural aversion to ambiguous situations?

Accepted Answer

Uncertainty avoidance refers to a cultural tendency to avoid ambiguous situations and to seek clear rules and structures. This tendency can manifest in a preference for following traditions, a need for detailed instructions, and a dislike of risk-taking. Masculinity, power distance, and individualism are other dimensions of culture measured by Hofstede's cultural dimensions theory, but they do not specifically relate to aversion to ambiguity.

Question 6

In their 1993 paper, Doupnik and Salter found that countries tended to cluster in terms of the similarities or differences of their accounting systems.These researchers attribute the large cluster around United Kingdom to:

Accepted Answer

Doupnik and Salter attribute the large cluster around United Kingdom to the colonial influence of Great Britain on accounting development.

Question 7

A cultural emphasis on values of performance and achievement rather than values of relationships, caring, and nurturing is referred to as:

Accepted Answer

Masculinity, in the context of Hofstede's cultural dimensions theory, refers to a society's preference for achievement, heroism, assertiveness, and material rewards for success. It contrasts with a society that values cooperation, modesty, caring for the weak, and quality of life, which is considered feminine.

Question 8

In Gray's framework for accounting system development, the cultural dimensions of individualism, power distance, uncertainty avoidance, and masculinity directly affect:

Accepted Answer

Gray's framework for accounting system development posits that cultural dimensions such as individualism, power distance, uncertainty avoidance, and masculinity influence accounting values, which in turn affect accounting systems.

Question 9

The concepts of professionalism, uniformity, conservatism, and secrecy are classified in Gray's framework for accounting system development as:

Accepted Answer

Gray's framework for accounting system development includes four accounting values, which are professionalism, uniformity, conservatism, and secrecy. These values reflect the cultural dimensions that shape accounting practices in different countries and regions. Therefore, the correct answer is A, accounting values.

Question 10

Countries such as the U.S.tend to value self-regulation of accounting.What term is used to define this subculture?

Accepted Answer

The term used to define this subculture is professionalism. Professionalism refers to the idea that individuals within the accounting industry should be self-regulating, and that standards of conduct and practice should be maintained by the profession, rather than by external regulators or government agencies. This subculture values the expertise and judgement of accounting professionals, and places a high degree of trust in their ability to regulate themselves and provide high-quality services to clients.

Question 11

Individualism, power distance, uncertainty avoidance, and masculinity are examples of:

Accepted Answer

Individualism, power distance, uncertainty avoidance, and masculinity are all cultural dimensions. These dimensions were developed by Geert Hofstede to distinguish between different cultures based on their values and behaviors. They are used in cross-cultural communication and understanding to help individuals better understand and interact with people from different cultural backgrounds.

Question 12

In Gray's framework for accounting system development, optimism is a value of accounting standards that would most likely be found in _____.

Accepted Answer

Gray's framework proposes that accounting systems are influenced by cultural values, including optimism versus conservatism. Optimism is often associated with cultures that prioritize innovation and risk-taking, such as Australia. Therefore, the most likely choice in this question is B, Australia.

Question 13

A cultural preference for a loosely knit social fabric rather than a tightly knit social fabric is referred to as:

Accepted Answer

Individualism refers to a cultural preference for loosely-knit social structures where individuals are expected to take care of themselves and their immediate family only. This preference emphasizes personal achievement and privacy over group harmony and interdependence.

Question 14

In Gray's framework for accounting system development, which of the following countries tends to show a relatively high preference for conservative accounting standards?

Accepted Answer

Japan tends to show a relatively high preference for conservative accounting standards, reflecting its cultural values of uncertainty avoidance and long-term orientation, which influence its accounting practices to be more conservative and cautious.

Question 15

A cultural preference for accounting systems that rely on compliance with legal requirements is called:

Accepted Answer

Statutory control refers to a cultural preference for accounting systems that rely on compliance with legal requirements. This means that companies follow specific laws and regulations when it comes to their accounting practices, rather than choosing to operate based on personal or internal standards. This preference for statutory control is often seen in countries with stronger regulatory environments or in industries where legal compliance is particularly important, such as finance or healthcare.

Question 16

In Gray's framework for accounting system development, which of the following countries tends to have a relatively high degree of transparency in their companies' financial statements?

Accepted Answer

According to Gray's framework, countries with high power distance and high uncertainty avoidance tend to have less transparency in their accounting systems. Germany and Switzerland have high power distance, while Saudi Arabia has high uncertainty avoidance. The United Kingdom has lower levels of both power distance and uncertainty avoidance, leading to relatively higher levels of transparency in their accounting system.

Question 17

The 1993 study by Doupnik and Salter found that a cluster of Latin American countries indicated that the similarity of their accounting systems was related to:

Accepted Answer

The study found that the similarity of accounting systems in Latin American countries was related to the importance of inflation. This suggests that countries with high inflation rates tend to have similar accounting methods to deal with the challenges of inflation.

Question 18

In some countries, financial institutions operate under Shariah, which also gives guidance about accounting practice in these institutions.Shariah is the:

Accepted Answer

Shariah is the Islamic law governing human conduct that is derived from the Koran. In some countries, financial institutions operate under Shariah, which also provides guidance on accounting practices in these institutions.

Question 19

According to Gray's framework for accounting system development, the counterpart to the accounting value of "secrecy" is:

Accepted Answer

The counterpart to the accounting value of "secrecy" is transparency, which means providing access to relevant financial information to interested parties. Gray's framework suggests that secrecy and transparency exist on opposite ends of a spectrum, and an accounting system must balance the two to meet the needs of its users. Thus, the best choice is B.

Question 20

The term "Class B Accounting" as it is used by the researcher Christopher Nobes refers to:

Accepted Answer

Class B Accounting refers to accounting systems that were developed primarily for creditors and taxing authorities, rather than for external shareholders. These systems typically focus on the financial position and performance of a company for the benefit of these external parties, rather than providing detailed information about the company's operations and strategy. They may also be less transparent and less standardized than accounting systems designed for external reporting.

Quiz 2: Worldwide Accounting Diversity