The United Kingdom Cultural Dimensions Accounting Essay

This study provides an analysis and rating of Carminho Building Products LTD and its international enlargement for its nucleus concern competences in United Kingdom.

Methods of analysis include the treatment of Hofstede ‘s cultural dimensions and Gray ‘s accounting values. These dimensions shows how each states compare to each other in footings of an organizational behavior and the effects on its fiscal coverage. The consequences of the cultural dimensions can be found in the Appendixs.

Consequences from the analysis show that United Kingdom possesses high degrees of individuality and maleness with low degrees of uncertainness turning away and power distance. This shows that United Kingdom is classified as Professionalism, hence all accounting studies are made with greater grade of professional ego ordinance and the lower demand for authorities intercession.

United Kingdom ‘s cultural values are similar to Australia ‘s ‘ , hence with Australia ‘s accounting values of professionalism, it may be in the best involvement for Carminho Building Products LTD to spread out its concern in United Kingdom, nevertheless that may alter throughout the class of the study.

The study finds that the chances of the Carminho Builing Products LTD to spread out their nucleus competences internationally with its current analysis to be unequal. The major countries of failing in these study require farther probe on other factors such as political relations, Torahs and thorough apprehension of its concern constructs.

In bend, this study analysis ‘s Carminho Builing Products LTD cultural and historic influences and how this focal point can be used to profit Carminho Builing Products LTD ‘s research and development as a whole. However, there are restrictions to this study. The restrictions include ;

No existent set benchmark

No quantitative steps to analysis, but instead qualitative

Major stereotypes of influence

Laws and Regulations

Table of Contentss


The intent of this study is to understand the accounting criterions and values of United Kingdom and British severally. The several major prostrations that occurred in the US during 2004 prompted the UK authorities to beef up its regulative systems.

Furthermore, the range of this research is on the influences of accounting criterions of GAAP and IFRS and its convergence with United Kingdom GAAP ( known as United Kingdom ‘s FRS ) . However, the restrictions to this study are major stereotypes with Hofstede ‘s cultural dimensions, regulations and ordinances of United Kingdom and Australia and the differences between British FRS and Australia IFRS.

Current fiscal coverage demands for public companies in UK

There are several demands and a few are listed and described below:

Fiscal Reporting Standard ( FRS ) 100 is the application of fiscal coverage demands. This subdivision sets out the coverage demands for UK, and the fiscal statements must be prepared in conformity their eligibility. Financial Reporting Standards for Smaller Entities ( FRSSE ) apply for those who are eligible for it. Those who do non fall within the scope of FRSSE or make non wish to follow the criterions, must fix in conformity with FRC 102 The Financial Reporting Standards applicable in the UK, EU-adopted IFRS or A if the fiscal statements are the single fiscal statements of a qualifying entity, FRS 101 Reduced Disclosure Framework.

FRS 101 sets out a model which addresses the fiscal coverage demands and revelation freedoms for the fiscal statements of subordinates and parents that otherwise apply the acknowledgment, measuring and revelation demands of EU-adopted IFRS. These commissariats produce the same quality study but at a lesser cost.

FRS 102A provides accounting and coverage demands for unlisted entities. The standard completes a cardinal modernization of UK accounting criterions and was approved by the FRC Board on 5 March 2013.

The true and just position is a Companies Act construct and is hence a legal impression. However neither the companies Act nor the tribunals have attempted to specify it ( Millichamp 2002 ) . Fiscal statements are required to be presented in such a manner that they are true and just. Directors must see the fiscal statements that they approve are appropriate. Similarly, hearers are required to exert professional judgement before showing an audit sentiment. As a consequence, the Opinion confirms that it will non be sufficient for either managers or hearers to make such decisions entirely because the fiscal statements were prepared in conformity with applicable accounting criterions. A cardinal subscriber to the unity of fiscal coverage in the UK is that sentiment of the hearer.

Recent alterations in the UK coverage demands

The Financial Reporting Council develops accounting criterions which were officially the Accounting Standards Board ‘s duty ( ASB ) during mid 2012. The Accounting Council has replaced the ASB and now studies to the Codes and Standards Committee. FRS 100 of Financial Reporting demands is a new criterion created by the FRC and is effectual in January 2015.

Histories and Audit Exemptions and Change of Accounting Framework amends the Companies Act 2006 so that it aligns obligatory for audit thresholds with accounting thresholds, exempts certain subordinate companies from compulsory audit and subordinates from fixing histories. It besides makes it easier for companies who presently use IFRS voluntarily to exchange from IFRS to UK GAAP when fixing their histories.

The Companies Act 2006 has adopted a different attack to the presentation of the commissariats. In order to simplify the statute law, Part 15 CA 06 ‘Accounts and Reports ‘ is structured so that commissariats which apply to different sorts of company are easy identifiable. Accounting commissariats are no longer required in agendas, as they were under the Companies Act 1985.

Cultural Influences on fiscal coverage and revelation patterns

Obviously, there are no such constructs as culture-free accounting in this modern twenty-four hours accounting society. Rather many state ‘s accounting patterns are chiefly exhibited through cultural influences, hence the much sought one size fits all accounting patterns creates greater contention instead than a common apprehension. However, many states including the United Kingdom are presently under convergence of International Financial Reporting Standards ( IFRS ) .

There are four cultural dimensions researched by Hoftede to find cultural influences within a state in an organizational and concern scene. With the add-on of Gray ‘s accounting values, relationships are formed between the two theories. In retrospect these two theories when linked showed how each state ‘s cultural values impact on the accounting patterns. In bend, these different cultural values impact greatly on their economic, political relations, qualitative features, fiscal statements and revelation.

Power Distance

Power distance is defined as the extent to which the less powerful members within a state expect and accept that power is distributed unevenly. This cultural dimension trades with the fact that persons within society are non all equal.

As illustrated in the diagram under Appendix A, Britain is at the lower terminal of the power distance continuum. Australia shared a similar mark on this cultural dimension. In respects to possible enlargement chances in the United Kingdom, Carminho Building Products LTD does non hold to concern themselves as Australia has a Power Distance of 36, similar to United Kingdom. Additionally, higher-ups within Carminho Building Products LTD Australia are easy sought by employees and communicating is frequent to portion expertness and thoughts.


United Kingdom ‘s individuality is at 89 ( as shown in Appendix A ) ; this indicates that United Kingdom is a extremely individualistic society. Individuality is defined as a societal form that consists of slackly linked persons who view themselves as independent of collectives and who are primary motivated by their ain penchants, demands, rights and contracts ( London 2011 ) . In a individualistic society, persons within the society are largely concerned about themselves and their direct household. Furthermore, kids are taught to believe for themselves and how they can lend through society under a individualistic civilization.

Similarly, the Australian civilization besides portions a high mark within this dimension at a 90. This can be interpreted as, in footings of concern, it is expected from employers that employees display a trait of autonomy and enterprise. In add-on, the virtue of what an person has done or can make is the footing to which employers decide whether to engage or advance the person.


United Kingdom ‘s maleness is 66 ( as shown in Appendix A ) ; this indicates that UK “ is driven by competition, accomplishment and success ” ( Hofstede, unknown ) between co-workers. Therefore advancing motivational influence on behavior, this is where persons are guided by marks and are rewarded when specific marks are met. It encourages work ends to be set for specific undertakings, obviously through high power distance where persons need to be told what to make.

High maleness produce outstanding consequences for the short tally of the concern, as persons may fiddle with fiscal studies and discloses to derive an border on their co-workers or company. It haunts Carminho Building Products LTD in the long tally if it were to take United Kingdom, as these motivational behavior cause dysfunctional behavior without proper counsel and surveillance.

Uncertainty Avoidance

United Kingdom ‘s uncertainness turning away is 35 ; this indicates that the British “ are comfy with equivocal state of affairss ” ( Hofstede, unknown ) . Due to the low uncertainness, there is no demand or attempt put into seeking for infinite sum of unneeded information is provided to fix for the unsure hereafter.

Convergence between the accounting system of United Kingdom ‘s GAAP and other accounting criterions will be fast. Obviously through low uncertainness, the British do non mind alteration. This is when the Board for Research and Development of Financial Reporting Standards ( CINIF ) to the full surveies and so converges instead than take hazards.


Cultural values between the United Kingdom and Australia portion similar rankings in footings of cultural dimensions, with the lone major difference of uncertainness turning away. This goes to demo that if Carminho Building Products LTD were to spread out their nucleus competences in the United Kingdom, it will necessitate to take into history of the British cultural influences on fiscal coverage as they differ to Australian influences as explained above.

Graies Accounting Valuess

Harmonizing to Grays accounting values, United Kingdom is classified under Professionalism ( shown in appendix B ) . This term describes the “ presentation of fiscal coverage statements by different companies utilizing the same accounting processs, mensurating constructs, categorizations and methods of unwrap ” ( Deegan 2009, pg 140 ) .

Similarly, Australia is besides classified under Professionalism ( shown in appendix B ) . This allows Australians more flexibleness in its fiscal coverage provided that it is in line within the model. Professionalism is comparatively comfy with persons utilizing their ain opinion to judge what is true and just instead than follow a mindless stiff codification of regulations.

In decision, United Kingdom and Australia both are classified as Professionalism harmonizing to Gray ‘s accounting values. This is illustrated by the higher ranks in footings of individuality and the lower ranks in footings of uncertainness turning away. The higher the grade of professionalism, the greater the grade of professional self-regulation and the lower the demand for authorities intercession.

Political influences on the scene of fiscal criterions

Since 1973 when The International Accounting Standards Board ( IASB ) was established, harmonization of international accounting criterions became evident. Under the Companies Act 1985, one of Financial Reporting Council ‘s ( FRC ) duty is to publish accounting criterions. In 1990 Accounting Standards Committee ‘s undertaking of puting accounting criterions have been replaced by the Accounting Standards Board ( ASB ) . Soon after it started its activities, the ASB adopted the criterions issued by the ASC, so that they besides fall within the legal definition of accounting criterions. These are designated ‘Statements of Standard Accounting Practice ‘ ( SSAPs ) . Whilst some of the SSAPs have been superseded by FRSs, some remain in force.

The UK FRC along with accounting standard-setters from several states around the universe, IASB both are portion of the development of international criterions. There are at most, 10 parttime members who work for the Accounting Council.

Accounting criterions use to all companies, and otherA entities that prepare histories that are intended to supply a true and just position. The Foreword to Accounting Standards explains the authorization, range and application of accounting criterions.

The UK ASB has incorporated some International Financial Reporting Standards ( IFRS ) into UK Generally Accepted Accounting Principles ( GAAP ) . The ASB has issued an exposure bill of exchange of a criterion that will amend corporate coverage for UK entities that are non presently using EU-adopted IFRS. This excludes entities that are required to use EU adopted IFRS under jurisprudence, entities will hold the pick of using a UK-adopted IFRS for SMEs or IFRS. The exposure draft remark period ended on April 30, 2012. A concluding criterion is expected at the terminal of 2012 and is expected to be effectual for periods get downing on or after January 1, 2015.

Summary of Alumasc ‘s Annual Report

The Alumasc one-year study contains an overview of the fiscal high spots, the president ‘s statement, scheme and public presentation, administration and fiscal statements.

A figure of fiscal high spots that occurred during the financial twelvemonth of 2011 is that the gross has increased by 4 million lbs. In add-on, the order book value for the company increased by 9 million lbs. The monetary value of dividends, nevertheless, have dropped by eight pence per portion.

Harmonizing to the president ‘s statement, there has been a diminution in building activity in UK. To work out this, the president has suggest some alterations including doing the Engineering division operate independently in hopes of reconstructing the profitableness of Alumasc. Furthermore, portion of the Alumasc scheme is to present new merchandise development activities to work new market chances.

Many of Alumasc ‘s edifice merchandises concerns are strongly focussed on supplying effectual solutions to heighten sustainability in the reinforced environment. Leading places in energy and H2O direction have been established through the Alumasc group. Furthermore the company does recognize the betterment of their energy ingestion and this illustrates the concern for their C emanations.

The statement of income, fiscal place, hard currency flows, alterations in equity and notes are found under the fiscal statements of the one-year study.

Extra Reporting undertaken by Alumasc

As portion of Alumasc ‘s scheme, focal point on the development of modern and sustainable edifice merchandises concerns has increased and in consequence reduces H2O usage in reinforced environment and bettering energy efficiency. Furthermore, merchandises offered by Alumasc are made from reclaimable stuffs such as aluminum, difficult and soft forests and roofing gardening.

The one-year study besides covers the responsibilities of the Board, Remuneration, Nominations and Audit Committees and a descriptions of the board rating under the corporate Governance subdivision. This subdivision besides describes many policies Alumasc upholds such as the whistleblowing, graft and corruptnesss, concern moralss, traveling concern, internal confidence and stockholder dealingss.

In footings of Corporate & A ; Social Responsibility, Alumasc continues to be to supply a safe topographic point of work for employees, and wellness and safety remains the first docket point for all subordinate and group board meetings. The bulk of managers and many senior directors within the group have been trained to Institution of Occupational Safety and Health ( IOSH ) accreditation criterion.

Many of Alumasc edifice merchandises concerns are strongly focused on supplying effectual solutions to heighten sustainability in the reinforced environment. The group has established taking places in energy and H2O direction, through trade names such as Levolux, Elkington Gatic and our green roof operations, Blackdown and ZinCo. We are committed to complementing this leading by following environmentally sound concern patterns throughout our operations.

In add-on to the wider community benefits originating from our environmental programme, the group is committed to back uping local community enterprises and a figure of charitable contributions have been made throughout the twelvemonth.


In kernel, there is sufficient grounds to demo that Carminho Building Products LTD may profit if they choose to spread out their nucleus concern competences in UK. Other factors such as jurisprudence, political relations, single values and such must be taken into history.

Hofstede ‘s research of cultural values is so a great factor in which to see for enlargement, nevertheless it is a major stereotype on the peculiar civilizations and non separately selected values. Furthermore, even with the similarities with Brithish FRS to IFRS there would still be some major difference in the accounting criterions since British FRS originally came from US GAAP after all.