Claremont Colleges

Scholarship @ Claremont
CMC Senior Theses

CMC Student Scholarship

2011

The Effect of Culture on the Implementation of
International Financial Reporting Standards
Mitchell A. Skotarczyk
Claremont McKenna College

Recommended Citation
Skotarczyk, Mitchell A., "The Effect of Culture on the Implementation of International Financial Reporting Standards" (2011). CMC
Senior Theses. Paper 165. http://scholarship.claremont.edu/cmc_theses/165 This Open Access Senior Thesis is brought to you by Scholarship@Claremont. It has been accepted for inclusion in this collection by an authorized administrator. For more information, please contact scholarship@cuc.claremont.edu.

CLAREMONT McKENNA COLLEGE
THE EFFECT OF CULTURE ON THE IMPLEMENTATION OF INTERNATIONAL
FINANCIAL REPORTING STANDARDS

SUBMITTED TO
PROFESSOR MARC MASSOUD
AND
DEAN GREGORY HESS
BY
MITCHELL SKOTARCZYK

FOR
SENIOR THESIS
SPRING 2011

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Table of Contents

I. Introduction…………………….……………………………………………………………….4

II. Literature Summary………………………………………...………………...….……………..5

III. IFRS……………………...……………………………………………………..……………11

IV. Carve-outs…………………………………………………………………………………....18

V. Culture and Accounting………………………………………………………………………25

VI. Conclusion………………………………………………………………...…………………30

Appendix………………………………………………………………………………………...32

Bibliography……………………………………………………………………………………..37

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I. Introduction
As globalization increases at a blistering pace, more and more business entities continue to get involved in cross-border capital investments. A considerable cost can be applied to these types of transaction for the translation of financial statements prepared under dissimilar accounting guidelines into a comparable form. There exist a multiple number of accounting systems that create these dissimilarities, because accounting is a language