The effect of Hofstede’s cultural dimensions on the degree of compliance with IFRS Standards in developing countries

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Abstract

This paper aims to highlight the cultural impact of Hofstede (1980) on the degree of compliance with International Financial Reporting Standards (IFRS) in 55 developing countries for the year 2014, based on the method adopted by Elad (2015) in order to identify IFRS Standards. Results show that culture (by means of three components, namely power distance, uncertainty avoidance, and masculinity) does not promote the degree of compliance with IFRS. However, only one significant relationship was found between individualism and the degree of compliance with IFRS Standards. This finding confirms Gray’s (1988) observation that individualism fosters a climate of transparency and professionalism.

Keywords: Developing Countries, IFRS, Hofstede’s Cultural Dimensions, Corruption, Education, Investor Protection

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: M41

Received: 10.07.2021
Accepted: 18.10.2021
Published online: 20.10.2021

How to cite this paper: Chaieb, S. (2021). The effect of Hofstede’s cultural dimensions on the degree of compliance with IFRS Standards in developing countries. Corporate Ownership & Control, 19(1), 146–158. https://doi.org/10.22495/cocv19i1art11