Cross-Cultural Audit Analysis
1. Introduction
Accounting and auditing are traditionally viewed as a fixed set of rules and standards. However, despite predetermined regulations, various studies have indicated that some practices of accountants and auditors vary according to their cultures. In other words, "audit practice cannot be culture free" (Chen, Huand and Barnes, 2007: 61).
In its publication, EY (2015), one of the Big Four audit companies, contends that the role of audit is not restricted to a mere audit firm - client relationship, but audit can bring stability and assist society's growth, especially in this era of globalization. In spite of globalization enhancing intercultural business, extant literature of the relationship between auditing practices and judgment
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the integration of auditors with other stakeholders and the auditing context). This division seems plausible; however, it is still rather general and does not take into account the dynamic of cultural variation nor elaborate the subsections under these three groups. More recently, after a comprehensive literature review of related research on JDM and auditing, Nodler and Riley (2014) propose five categories of auditors' JDM that are most likely to be subject to cross-cultural divergence, namely overconfidence, risk and probability judgments, risk decisions, conflict decisions and ethical …show more content…
Overview of Hofstede's cultural dimensions
On its website, Hofstede Insights (2018) lists six cultural dimensions when comparing between countries:
" Power distance: The extent to which people in the society accept the unequal hierarchy or unequal distribution of power.
" Individualism - Collectivism: The degree to which individuals integrate into groups.
" Uncertainty avoidance: The extent to which people are tolerant for ambiguity.
" Long-term - Short-term orientation: The extent to which individuals dealt with events in the past and prepare for the present and future.
" Masculinity - Femininity: The level to which the society values competition, success and achievement (masculine) or caring about other people and quality of life (feminine).
" Indulgence - Restraint: The extent to which people in the society control their desires and impulses.
(Adapted from www.hofstede-insights.com,
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