Culture: An Important Factor in Determining the Accounting System

Abstract

This paper addresses some of the cultural aspects that affect the accounting system in Albania and its implementation’s quality. Many authors have studied and observed cultural dimensions and their impact on the accounting system. A nation's culture affects every life aspect consequently accounting is included. Accounting system is not a subject affected only by the culture but by all economic, political and legal background elements in which it is fitted. Accounting system is simultaneously influenced by the background in which entities operate and by the organizational culture of each of the units. Observing the Albanian financial reporting and its implementation quality will be discussed how cultural differences affect the harmonization of accounting and financial reporting. In the first part of the paper will provide a literature review that constitutes the theoretical framework in which will be later made the findings analysis. The paper’s metodology will be based on a qualitative model which will elaborate the findings from the interviews and questionnaires with the preparers of the financial statements and a group of their users. The outcomes from the analysis will provide the conclusion and recommendations of the paper.