Differences In The Accounting Principles Of US And UK-The Analysis On Culture Roots

Many scholars hold the view that the General Accepted Accounting Principles (GAAP) of the United States and those of the United Kingdom are similar due to their similar political and economic systems and long-lasting historical bound and connections. However in this paper the author would like to explore how culture as artifacts of social and economic development, especially at attitude and value level, can impose influence on the formation and development of economic phenomenon. The GAAP of the two countries are taken as the research subjects. The two sets of GAAPs have shown dissimilarities both in the regulation setting and the provision wording. The author believes some of the dissimilarities are deeply rooted in cultural differences.To prove this hypothesis the author selected some provisions from the two GAAPs as samples for the study. Fifteen pairs of differences have been identified. On the basis of Gray's accounting value theory and Hofstede's culture dimensions theory, the thesis classified these pairs of GAAP differences according to the accounting values they present. Then the author explored further on the culture dimensions they belong to and finally the culture drives behind the GAAP differences have been analyzed.Through the analysis, the thesis confirmed that culture factor can be considered as one of the most important factors leading to the distinctions in GAAPs of two countries. The accounting practices and culture are inter-related and inter-influenced. The research of this thesis will be significant, to some extent, for the international accounting harmonization and the Chinese GAAP revision and consummation.