An empirical assessment of Gray's accounting value constructs

Gray [Abacus (1988) 1] proposed a framework for a theory of cultural relevance in accounting. This renewed an interest in culture-related studies in international accounting. To date, much of this literature has been theoretical or subjectively descriptive because the elements constituting Gray's framework lack an operational foundation. This paper addresses this shortcoming by presenting research that operationalizes and evaluates the empirical usefulness of Gray's accounting subcultural value constructs of professionalism, uniformity, conservatism, and secrecy. The paper presents the results from an accounting values survey (AVS) administered to a sample of users and preparers of financial statements in New Zealand and India. The data are subjected to multivariate analysis, and the results provide some support for the usefulness of Gray's accounting values as empirically based classificatory constructs, although they may require some adaptation and reinterpretation. Professionalism appears as the most clearly defined construct and the elements of the uniformity construct also hold together well, although appearing to attract elements of the construct of secrecy. The part of the secrecy construct concerned with the level of detail in financial statements appears to be reasonably well defined by respondents to the survey and conservatism seems to fragment into two subdimensions, perhaps representing measurement and the disclosure aspects of that construct. A question arises as to the possible existence of other, as yet unrecognized, accounting-value constructs. The findings suggest the importance of further quantitative survey research of this type to investigate the relevance of cultural factors in understanding international accounting practices.