There are seven major divergent forces, which shape the Financial Reporting internationally. I am going to explore each one individually with references to UK, USA and Bulgarian Financial Reporting Practices.

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There are seven major divergent forces, which shape the Financial Reporting internationally. I am going to explore each one individually with references to UK, USA and Bulgarian Financial Reporting Practices.

Culture

As Gray (1988, page 5) notes:

Societal values are determined by ecological influences and modified by external factors... In turn, societal values have institutional consequences in the form of the legal system, political system, nature of capital markets, patterns of corporate ownership and so on.

Gray examines Hofstede cultural dimensions1, based on his study of 100,000 IBM employees in 39 countries and renames his dimensions. Individualism vs. conservatism becomes professionalism vs. statutory control; large vs. small power distance becomes uniformity vs. flexibility; strong vs. weak uncertainty avoidance becomes conservatism vs. optimism; and masculinity vs. femininity becomes secrecy vs. transparency.

Hofstede did not study Bulgaria, but he studied Yugoslavia, which still was a country then. People from the Balkan region have very similar cultures, common sense aspect and values, that is why I think it is save to claim, that Hofstede's findings can be applied to Bulgaria as well. Hofstede's ratings for UK, USA and Yugoslavia in the different dimensions are as follows: