WHICH INTERNATIONAL CULTURES FAVOR DISCLOSURE OF RISK

Patricia A. Bentley
Keiser University
Mitchell A. Franklin
Syracuse University
ABSTRACT
In 2009, through a proposed revision to IAS 39 entitled IFRS 9, Phase I, Measurement
and Classification of Financial Instruments, the International Accounting Standards Board (IASB)
tried to influence public use of fair value (FV) for bank financial instruments but failed. This
research codes for pro- or con- use of Level III FV inputs for valuing hard-to-value equities, the
245 commentary letters received by the IASB on proposal, ED/2009/7.
The purpose of the study is to determine if cultural patterns existed regarding accounting
disclosures. The driving question was whether any identified patterns followed the accounting
cultural orientations of Doupnik and Salter (1993) as coded in variable DSCODE, whose findings
were consistent with Mueller (1967, 1968), Nobes (1983), and Gray (1988). This past research
supported the view that micro-cultures are more likely to disclosure relevant risk information to
outside parties, whereas macro-cultures are not likely to disclose risk. The findings of this study
proved statistically significant. Observation showed Anglo cultures more favorable to disclosure
than other international cultures. Findings also showed that most international respondents
(85.7%) favored cost valuation in lieu of Level III market value estimation. Results update
cultural clustering in the area of risk disclosure.