The impact of National Culture and Political Instability on sustainability reporting: A comparative study
الباحث الأول:
Akeel Almagtome
الباحثين الآخرين:
Maitham Khaghaany
المجلة:
the International Islamic University Malaysia (IIUM), Kuala Lumpur, Malaysia December 31, 2017
تاريخ النشر:
None
مختصر البحث:
National culture is considered as an important determinant in financial reporting practices through its effects on firm choices of accounting procedures or determining the extent to which firm should disclose detailed information in financial statem…
National culture is considered as an important determinant in financial reporting practices through its effects on firm choices of accounting procedures or determining the extent to which firm should disclose detailed information in financial statements. Therefore, the level and extent of information provided by companies working in different cultures would be different. In addition, the political instability and armed conflict have an important effect on the level of information required from companies by the society in which they work. Iraq is considered as one of the countries that witnessed a political instability and armed conflict, especially since the events that followed the ISIS invasion of Mosul in mid of 2014, as a result, the society effort has been utilized to support the military operations, which in turn lead to adversely affect the social pressure for transparency in comparison with other countries.
This paper utilizes Hofstede’s cultural value theory to identify the role of national culture in improving the Corporate Sustainability reporting practices. This cross-cultural research seeks to provide answers to questions regarding the impact of national cultural values on corporate sustainability reporting levels of a two-part study. The first part examines the correlation between Sustainability reporting scores of the sample companies and Hofstede’s individualism, masculinity, power distance, uncertainty avoidance, long term-orientation, and indulgence dimensions, while the second part examines the impact of political instability and armed conflict on corporate sustainability reporting by comparing the level of CSR in Iraq with those in developed countries (Australia and Germany). The annual reports of sample consist of 96 companies were collected and analyzed for the financial year ended in 2015, the sample companies cover three countries are Australia (38), Germany (37), and Iraq (21). The results indicate that corporate sustainability reporting CSR increase in societies with high individualism, low masculinity, low power distance, low uncertainty avoidance, and high indulgence characteristics. The results also indicate that there is a big gap in the CSR between Iraqi companies and other companies in Australia and Germany results mainly from cultural, political and security differences.
Keyword: Sustainability Reporting, National culture, Hofstede’s cultural dimensions, Annual reports, Political conflict, Political Instability
