Document Type


Date of Degree

Spring 2017

Degree Name

PhD (Doctor of Philosophy)

Degree In

Business Administration

First Advisor

Daniel W. Collins

Second Advisor

Paul Hribar


I examine whether cultural differences in trust towards others, materialism, and risk aversion lower financial statement comparability between countries that require International Financial Reporting Standards (“IFRS”). Evidence from various academic disciplines suggest that cultural beliefs and values affect individuals’ estimates and judgments and their consequent decisions, including economic and financial decisions. I posit that certain cultural beliefs and values also affect the estimates and judgments of corporate managers, resulting in inconsistent reporting decisions for given economic events and lower financial statement comparability. I find that two countries have lower comparability when there are greater cultural differences in trust towards others, materialism, and risk aversion. In cross-sectional tests, I find weak evidence that stronger enforcement of IFRS moderates the cultural effects on cross-country financial statement comparability. Stronger enforcement of regulations and law does not moderate the cultural effects. These findings suggest that having a strong IFRS, regulatory, or legal enforcement does not effectively moderate the impact of culture on cross-country financial statement comparability. A possible explanation is that cultural influence on financial reporting is also manifested through enforcement officials; in other words, those in charge of the enforcement are also subject to the same cultural beliefs and values as others involved in the reporting process, making moderation less likely.


Financial Statement Comparability, IFRS, National Culture


viii, 75 pages


Includes bibliographical references (pages 41-46).


Copyright © 2017 Byung Hun Chung