The impact of national influence on accounting estimates

Abstract

The results of prior research suggest that national accounting systems are significantly associated with differences in market valuations and various other macromeasures. These results, however, rely heavily on the analysis of archival data or survey evidence directed at national system differences. As Pownall and Schipper [Accounting Horizons (1999) 259] note, archival research necessarily depends on the information in the financial reports and cannot explain the process linking the underlying standards to the reported information. This study examines this process by investigating judgments made by accountants in France, Germany, and the United States. To facilitate a comparison of this process across international boundaries, our experiment presents these accountants with the same economic facts that are governed by similar financial reporting rules. Our results indicate that, even given similar facts and rules, judgments among the three nations' accountants vary significantly. They also suggest that national culture interacts with findings accepted as general within behavioral decision research.

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