Influence of Organizational Culture on Accounting Procedures. (Essay Sample)

INFLUENCE OF ORGANIZATIONAL CULTURE ON ACCOUNTING PROCEDURES
By (Name)
Course
Professor
Name of the School
City
Date
Influence of Organizational Culture on Accounting Procedures
Introduction
Organizational culture entails a variable set of beliefs, values, rules, and assumptions, which govern the behavior, responsibilities, and expectations of employees. A growing body of literature uses Hofstede-Gray’s cultural manifestations namely individualism, collectivism, and distance from power, the perception of uncertainty, professionalism, statutory control, conservatism, optimism, confidentiality, and transparency to investigate how organizational culture influences accounting procedures and practices (Prescott & Vann 2015). Corporate culture is an influential environmental factor that affects auditing reports, information disclosures, financial statements, and the implementation of standard accounting practices.
Culture underpins how organizations prepare audit reports and financial statements. Building credible audit reports require accounting managers to avoid all forms of interests and conflicts from internal and external pressures (Hassaan 2013). Organizations with an unequal distribution of power witness auditing and financial misstatements as accounting managers alter information to match the interests of their superiors. Even though accounting standards necessitate professional judgment, junior accountants might be under pressure to maintain good relations with the organization’s principals. Bricker (2018) adds that individualism and collectivism influence the accounting practices of a company. Notably, a culture of individualism rather than collectivism may oblige accounting managers to skip accounting procedures and manipulate financial data to achieve a particular public image. Thus, culture impacts how firms prepare audit reports and financial declarations.
Corporate culture has a significant impact on disclosures and transparency.