Culture and Environment and Its Effect on the Future of Accounting in Business: Practical Application in UAE

Date:  2021-04-26 19:09:46
7 pages  (1858 words)
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Research Topic: Culture and environment and its effect on the future of accounting in business: practical application in UAE

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Introduction: one of the courses at the secondary level is business education. This subject is important as it equips students with the perquisite knowledge of the real business world. It is no doubt that accounting is just more than numbers, methodologies and financial statements. It holds to primary standards and rules to preserve the professions aims and purpose; however, it is also shaped by various external and internal forces. Accounting is influenced by socio-economic variables, political variables, and the environment. These variables encompass sources of capital, levels of economic development, inflation rates, culture and complexities of business enterprises. Different Universities in different nations have varying cultural beliefs on accounting, and thus their influence on accounting is different. This research study seeks to explore how culture and environment affect the future of accounting in business in the United Arab Emiratess Universities.

Scope: I did begin working on my project in March. In my schedule I had a plan to interview some students from UAE universities regarding their perception on the effect of culture and the environment on the future of accounting. I will have to visit some universities in UAE nations in order to obtain information. I will distribute my questionnaires to the students and later collect them and analyze the data.

Theoretical Framework: I will begin by embracing past research and studies. I will focus on how University cultures and environment in UAE nations will affect the future of accounting. Two models will be used as a framework; Grays accounting values and Hofstedes Cultural Dimensions. The significance of applying these models is to help in finding a pattern as to how the countrys financial reporting is influenced by external factors like culture. Moreover, the models are most suitable for UAE because it is becoming a hub for fostering accounting services, the quality and the manner of financial reporting plays an integral role in the failure or the success of the countrys endeavors.

Literature Review

How Culture and the environment effects the future of accounting in UAE Universities

The UAE cultural values are deeply rooted in the Islamic and Arabic traditions. They place much precedence to the family and their tribes. The resultant impact is that individualism is given less precedence is given a back seat while much attention and focus given to societal and family expectations and demand. However, over the last few years, this trend is fast changing as a result of the dramatic growth in economic activities as well as the huge number of expatriates living in the nation. A low score on IDV (individualism index) was assigned to UAE by Hofstede (Hofstede, 1983). It was ranked 38th in comparison to the worlds average ranking of 64 (Campbell, 2007). This ranking denotes a collectivist society as it is far from an individualist society. This kind of society prefers a tightly knit social framework where people expect their clan, relatives or any other group to take care of them without questioning their loyalty. This kind of culture has a direct effect on the nation's accounting practices and approaches. There is always a high power distance ranking which denotes a high inequality of wealth as well as power. Moreover, the populace of nation has an acceptance and expectation of their leaders and this situation do not subvert them. UAE populace believes in their leaders, for instance, tribal leaders were being looked up to for all kinds of advice including political, moral and economic guidance.

Governmental entities, as a result of this concentration of power, are tasked with the responsibility of regulating auditing and accounting practices and standards. In UAE entities like the ESCA and the ministry of the economy as well as the central bank are responsible for regulating the accounting professions.

With regards to Hofstedes cultural score and Grays model, it is expected that accounting practices be uniform in enforceability as well as in design. However, this is different with UAE as it has one of the fasted growing and developing economies globally. UAE tends to be more conservative when it comes to selecting and embracing accounting standards. International Accounting Standard (IAS) for instance, allows firms to reevaluate equipment and property to reflect the value of the assets. A study that reviewed all the 120 companies that are registered on both the Abu Dhabi and Dubai stock market showed how the majority of the companies opted to implement fair value as a basis for evaluating their long-lived assets.

Another culture in UAE that is most likely to affect its future regards their disclosure, many users are constantly complaining that UAE firms do not report their financial reports and if they provide the report, it is always not timely, or the disclosure is inadequate. For instance, a report named unveiling a culture of secrecy indicated that one of the biggest problems in analyzing UAE stock market is the scarcity of information. There are more privately owned firms in the country which are increasing fostering the culture of secrecy. Moreover, most of the public companies in the nation continue to believe that divulging their data is risky or harmful.

UAEs environment also has been determined to have a significant effect on the nations accounting. The political, economic as well as the legal and taxation system affects accounting practices. With regards to the political environment, UAE is a federation of seven emirates with most of the powers accorded to the federal government. The countrys political institutions are too weak to offer a significant framework with regards to accounting since they are largely dominated by ruling families. Britain dominated the region, and as a result, the accounting principles in UAE are largely influenced by the British style of accounting. With regards to the economic environment, UAE is largely liberal, market-oriented and business friendly.

Statement of the problem: The United Arab Emirates is developing and evolving at unprecedented pace. The Universities in the country are deeply rooted in its Islamic and Arabic culture. As it is growing into an economic force in the region, precedence is placed on its accounting practices and the factors that are affecting its accounting. Notably, culture and its environment have a significant impact on its accounting and are more likely to affect its future accounting. This research examines how culture and environment and its effect on the future of accounting in business in UAE Universities.

Methods, Tools, and Techniques to be used

Just like any other research, there will be a collection of data, their analysis and interpretation in the best means possible to achieve accurate findings of the study. Research can be sorted either through quantitative and qualitative approaches to the study of the data collection. The qualitative methodology puts precedence on words and perceptions to show efforts and reality to signify individuals in characteristics circumstances. On the other side, the quantitative approach aims at bringing out of solid scholarly articles that depend on the number showing assessments or ideas. Qualitative methodology entails systems that fit the center of the continuum getting to the constructionist end. Furthermore, it controls the ontology that has some impacts that have been looked into by different researchers and shows that there is still a lot that needs to be looked into and has also been determined that epistemology is probabilistic. The primary goal of qualitative research is to deliver knowledge as compared to the quantitative methodology that shows the measure.

This research will focus on acquiring subjective which is the qualitative methodology. This means that it will use the qualitative research design. The study will use primary and secondary qualitative approaches since it is linked to interpretative reasoning about the culture and environment and its impacts on the future of accounting in the United Arab Emirates (UAE). The primary source of data collection that would be used in this research design techniques would be the observation technique and also through intense interviews. It is a sure belief that qualitative data will give enough data concerning how culture and environment can affect the future of accounting in the United Arab Emirates.

Observational Approach

This technique will be used to collect data in the UAE since it is easy to note the daily norms in that environment. Observational techniques refer to the methodological depiction of occasions, practices and the social setting in the research. This kind of technique will be useful to the researcher at will enable the researcher to use various approaches to check and manage the nonverbal movement of evaluations, understand who adjoins with whom or what to take a small group of individuals to help in providing feedback on how associates can interact with one another and evaluate the total time taken on various approaches.

In this study, the researcher will take permission from his senior to watch the groups in the UAE without the knowledge of those that are being watched. This will ensure that the respondents do not act in a strange way that is not their culture.

Interview Technique

A comprehensive interview is an unstructured personal interview that entails comprehensive probing to make respondents to speak freely and show comprehensive feeling and belief concerning the topic under discussion. This technique will be useful as it will give ways of getting imperative information concerning the culture and environment of UAE and its impacts to accounting in the future. The researcher intends to make averagely 20 in-depth interviews with various people in the United Arab Emirates. The questions of the interview will focus on how culture and the environment at the United Arab Emirates will impact on the future accounting of the company. Also, the interviews will be scheduled for a time frame of averagely 30 minutes each. The interview questions are:

For employees

What are your future plans to improve your skills in your work?

What are the challenges you experience when you join a new workplace

How do you apply theory in work place?

For students:

What do you expect about your future job?

Whats your take regarding your education level

Any plans to improve your education level?Rationale for the problem statement

The reason behind focusing on how culture and the environment will impact on the future of accounting in the UAE is because there is a connection between the culture of the organization and its accounting. Understanding this will help in explaining whether it will be beneficial to the future of accounting or harmful.

The inductive approach will be the statistical methods that will be used. It will start with the background analysis of the situation and later on build on the main issue of the research. There will be the focus on the template analysis in the research. Template analysis will help analyze the qualitative data. This can be done through the copies of the interviews, electronic meetings or deciphered surveys. The expert involved in this should give a coherent analysis of the information by clearly translating them.

Time and Cost Estimates

Activity Schedule

Activity Period

Preparing everything for the study Week 1

Data collection Week 2-3

Analysis of the data and the interpretation Week 4

Being that this is a research, fund will be needed. The cost will be highly minimized. The study aims...

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