The role of cultural dimensions in shaping the generally accepted accounting practices in Palestine

145 Pages·2015·1.2 MB·English

by  Mohammad H. Khafaja

Al Azhar University - GAZA
Deanship Of Postgraduate Studies
Faculty Of Economic and Administration Science
Accounting Master Program

The role of cultural dimensions in shaping the generally
accepted accounting practices in Palestine
ﻦﻴﻄﺴﻠﻓ ﻲﻓ ﺔﻟﻮﺒﻘﻤﻟﺍ ﺔﻴﺒﺳﺎﺤﻤﻟﺍ ﺕﺎﺳﺭﺎﻤﻤﻟﺍ ﺢﻣﻼﻣ ﻞﻴﻜﺸﺗ ﻲﻓ ﺔﻴﻓﺎﻘﺜﻟﺍ ﺩﺎﻌﺑﻷﺍ ﺭﻭﺩ

Prepared by:
Maysa Ata Darwish

Supervised by:
Prof. Jabr Ibrahim El-Daour Dr. Emad Mohammed El-Baaz
Professor of accounting Assistant Professor of Accounting
Al Azhar University – Gaza Al Azhar University - Gaza

A thesis submitted in partial fulfillment of the requirements for the master
degree in accounting science at Al-Azhar University-GAZA
2014-1436
ﲓﺣﺮﻟا ﻦﲪﺮﻟا ﷲ ﻢﺴ�

ﲆَ َ�وَ ﲇ� َ َ� ﺖَ ﻤْ ﻌَ ْﻧأ� ﱵِ�ﻟا ﻚَ ﺘَ ﻤَ ﻌْ ﻧِ ﺮَ ﻜُ ﺷْ أ� نْ أ� ﲏِ ﻋْ زِ وْ أ� بِّ رَ لَ ﺎَﻗ ﴿:ﱃﺎﻌﺗ لﺎﻗ
ﻦَ ﻣِ ﱐِّ اوَ ﻚَ ﻴْ َﻟا ﺖُ ْبُﺗ ﱐِّ ا ﱵِ�ﻳرِّ ذُ ﰲِ ﱄِ ﺢْ ﻠِ ﺻْ أ�وَ ﻩُ ﺎﺿَ ﺮْ َ� ﺎ�ً ﻟِﺎﺻَ ﻞَ ﲻَ ْ أ� نْ أ�وَ ي� �َ ِاوَ
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﴾ﲔﻤِ ﻠِ ﺴﻤْﻟا.
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(15) :فﺎﻘﺣ�ٔ ا ةرﻮﺳ ,ﱘﺮ� نٓأﺮﻗ
I
Dedication

To my beloved Dad, Prof. Ata Darwish
No word can describe you or your unconditional support, thanks for being
my hero.

To my precious Mum,
Thanks for giving me the moral support I required, and for being the shiny
sun in my life.

To my adorable husband & best friend, Ahmad Al Sayed
Thanks for your patience, unlimited support and for being my wonderful
soul mate.

To my beloved brothers & sisters,
To my husband's amazing family,
And my sweet friends
Thanks for your support

II
Acknowledgements

I would like to acknowledge the contributions of the following
groups and individuals to the development of my study.

Before anything, thanks God who guides me in my everyday life,

for giving me the chance and the determination to do this study
and for being beside me all the time.

I am heartily thankful to my supervisors, Prof. Jabr Ibrahim El-

Daour, Dr. Emad El-Baaz whose encouragement, supervision
and support from the preliminary to the concluding level enabled
me to develop an understanding of the subject.

My sincere thanks also go to Prof. Salem Helles, a professor of

accounting, and Dr Ali Al Naami, an associate professor of
accounting, for their efforts in reading my study and enrich it
with their valuable comments in the discussion.

Also thanks to the evaluators and the respondents of the

questionnaire for their effort in conducting this study.

Lastly, I offer my regards and blessings to all of those who
supported me in any respect during the completion of the study.
III
Table of content

Item Title Page No.
Dedication II
Acknowledgment III
Table of content IV
List of tables VII
List of figures IX
Abbreviations X
Abstract XI
Abstract in Arabic XII
Chapter 1: General framework of the research 1
1.1 Introduction 2
1.2 Problem statement 4
1.3 Study importance 5
1.4 Study objectives 5
1.5 Study hypotheses 6
1.6 Study variables 7
1.7 Limitations 7
1.8 Previous studies 8
Chapter 2: Cultural dimension & Accounting practices 17
2.1 Introduction 18
2.2 Concept of culture 18
2.2.1 Culture definitions 18
2.2.2 Culture layers 20
2.2.3 Culture levels 22
IV
2.2.4 Hofstede Cultural dimensions 24
2.2.5 Other environmental factors 25
2.3 Concept of accounting 31
2.3.1 Accounting models 32
2.4 Linking accounting to cultural dimensions 34
2.4.1 Accounting sub-cultural 34
2.4.2 Proposed linkage of accounting to other environmental 38
factors
2.5 Accounting in Palestine 44
Chapter 3: Methodology 50
3.1 Introduction 51
3.2 Study design 51
3.3 Data collection 52
3.4 Population 53
3.5 Questionnaire content 57
3.6 Validity and reliability of the questionnaire 58
3.7 Statistical techniques used 67
Chapter 4: Data analysis and discussion 68
4.1 Introduction 69
4.2 Testing the distribution of the population 69
4.3 Discussion and hypotheses test 70
4.4 Comparing results to Gray's propositions 103
4.5 Multiple regression model 106
Chapter 5: Conclusions & recommendations 109
5.1 Introduction 110
V
5.2 Conclusions 110
5.3 Recommendations 111
5.4 Further studies 112
References 113
Appendices 118

VI
List of tables
Table No. Title Page No.
2.1 Levels of Culture
23
2.2 A classification of political systems 27
2.3 Summary of recognition and valuation rules, disclosure and
33
auditing rules respectively.
3.1 Classification of the firm sector
54
3.2 Capital Equity
54
3.3 Duration of being an active firm
55
3.4 Duration of being a listed company in PEX
55
3.5 Gender
56
3.6 Current vacancy
56
3.7 The correlation coefficient between each paragraph in the
60
field and the whole field (Cultural dimensions)
3.8 The correlation coefficient between each paragraph in the
62
field and the whole field (Accounting practices)
3.9 Structure Validity of the Questionnaire
64
3.10 Split-Half Coefficient method
65
3.11 Reliability Cronbach's Alpha 66
4.1 One Sample K-S
69
4.2 Individualism vs. collectivism
72
4.3 Power distance degree
74
4.4 Uncertainty avoidance degree 76
4.5 Masculinity vs. femininity
78
4.6 Long vs. short-term orientation
79
4.7 Indulgence versus restraint
81
4.8 Cultural Dimensions
82
4.9 Professionalism (Authority)
84
4.10 Disclosure 87
4.11 Uniformity (Enforcement)
89
4.12 Conservatism 91
4.13 Accounting Practices
92
VII
4.14 A correlation between Individualism vs. collectivism and
93
accounting practices
4.15 A correlation between Power distance degree and
94
accounting practices
4.16 A correlation between Uncertainty avoidance degree and
95
accounting practices
4.17 A correlation between masculinity vs. femininity and
96
accounting practices
4.18 A correlation between Long vs. short-term orientation and
97
accounting practices
4.19 A correlation between Indulgence versus restraint and
98
accounting practices
4.20 One way ANOVA test for differences at level α = 0.05 the
role of cultural dimension in shaping the generally accepted
99
accounting practices in Palestine refer to Classification of
the firm sector
4.21 One way ANOVA test for differences at level α = 0.05 the
role of cultural dimension in shaping the generally accepted
100
accounting practices in Palestine refer to Capital Equity (in
USD)
4.22 One way ANOVA test for differences at level α = 0.05 the
role of cultural dimension in shaping the generally accepted
101
accounting practices in Palestine refer to Duration of being
an active firm
4.23 One way ANOVA test for differences at level α = 0.05 the
role of cultural dimension in shaping the generally accepted
102
accounting practices in Palestine refer to Duration of being a
listed company in PEX
4.24 Summary of tested hypothesis and comparison with Gray,
103
1988 propositions
4.25 ANOVA
106
4.26 Regression model Summary
106
4.27 Coefficients
107

VIII
List of figures

Figure Title Page No.
No.
2.1 Hofstede’s Layers of Culture
20
2.2 Schein’s Layers of Culture
22
2.3 Culture and accounting systems in practice
35
2.4 Culture, societal values and the accounting subculture
38
3.1 Methodology flowchart
52

IX