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This study extends prior cross-cultural research by examining the effects of both cultural and noncultural factors on the judgments of professional accountants. It examines the extent and the cause of differences in judgments of professional accountants in Australia and Fiji when interpreting and applying selected International Financial Reporting Standards (IFRS). A comparative study between these two countries, which have both adopted IFRS, provides empirical evidence that IFRS are not interpreted and applied consistently. It supports the views that: (a) both national culture and organizational culture (Big 4 and non-Big 4 firm affiliations) have a significant effect on the manner in which professional accountants in a country interpret uncertainty expressions contained in IFRS; and (b) national culture and organizational culture interact to influence the judgments of professional accountants. Further, the results of the effects of noncultural factors on the judgments of professional accountants in Australia and Fiji show that the professional accountants' perceived level of task complexity has a significant effect on their judgments. An important implication of this study is that the adoption of IFRS in different countries alone may not result in uniformity in financial reporting as IFRS may not be consistently applied by those countries because of differences in cultural as well as noncultural factors.

Servitization increases the uncertainty exposure of provider firms due to the operational differences between services and production which is further increased when operations are set in triads. The purpose of this paper is to analyse the uncertainty exposure in servitized triads and explore suitable organisational responses.

A conceptual frame is defined detailing three uncertainty types (environmental, organisational and relational uncertainty) and suitable organisational responses to these. This frame guided the analysis of in-depth case evidence from a cross-national servitized triad in a European-North African set-up which was collected through 29 semi-structured interviews and secondary data.

The empirical study identified the existence of the three uncertainty types and directional knock-on effects between them. Specifically, environmental uncertainty created organisational uncertainty which in turn created relational uncertainty. The uncertainty types were reduced through targeted organisational responses where formal relational governance reduced environmental uncertainty, service capabilities reduced organisational uncertainty and informal relational governance reduced relational uncertainty. The knock-on effects were reduced through organisational and relational responses.

This paper makes two contributions. First, a structured analysis of the uncertainty exposure in servitized triads is presented which shows the existence of three individual uncertainty types and the knock-on effects between them. Second, organisational responses to reduce the three uncertainty types individually and the knock-on effects between them are presented.

Focusing on the direction of foreign acquisition, this study aims to differentiate the effect of institutional distance on the level of ownership. The authors identify several theoretical and methodological issues that might account for the inconsistencies in the literature and provide remedies accordingly. Specifically, the authors propose perceived institutional distance as a conceptualization of distance that controls for asymmetric uncertainty.

The authors test the framework with ordinary least squares regression for a sample of 14,192 firm-entries in 115 target countries over 2007–2017.

The authors find that institutional distance shows a negative effect on equity ownership in all-inclusive global samples, while there are two imbalanced opposite effects if direction is considered. This casts doubt on the validity of studies that ignore direction. The authors suggest that multinational enterprises entering countries with lower-quality institutions tend to perceive more pronounced distance effects than those expanding the other way around. Hence, the authors argue that “perceived institutional distance” better explains the functional role of distance than simple distance.

This study better delineates the link between distance and uncertainty and enhances managerial insights for entry mode selection. For policy-making purposes, the authors also show that improvement in institutional quality has a different effect on foreign resource commitment in developed and developing countries.

To the best of authors’ knowledge, this is the first study that considers both directionality and imbalance in institutional distance and proposes a measure to control for non-linear asymmetric relationship between distance and ownership. The authors extend the institutional theory and show the superiority of perceived institutional distance in predicting ownership implications.

Using a phenomenon known as the bullwhip effect, the authors explore why additional uncertainty in the marketplace can create severe disruptions in global supply chains (GSCs). The purpose of this paper is to analyze related risks in regional vs GSCs during low and high levels of uncertainty. The authors propose and discuss a number of potential implications alongside some tactics that may help mitigate disruptions in some cases before they become terminal problems for the supply chain sustainability.

Monte Carlo simulation is used to generate the conditions of uncertainty and various scenarios that may emerge to challenge GSCs. Vensim software is utilized as a tool for simulation purposes. The authors considered scenarios applicable to manufacturing and retail sectors specifically because of storability property of goods.

Regional supply chains, as opposed to global ones, are more stable and reliable (less risk of disruption) during low and high levels of uncertainty. During uncertain times, upstream suppliers are at greater risk in GSCs. Firms must make strategic decisions that will secure its supply chain functionality and assess the likelihood of such events since many firms entered emerging markets.

Building on internalization theory, it shows that risk and survival are components of decision making that are further complicated by supply chains now operating globally in emerging markets. The paper demonstrates with simulation that GSCs are riskier than regional supply chains in low and high levels of uncertainty, particular as it relates to the bullwhip effect. It also provides recommendations about supply chain restructure and investments in communication improvements to reduce the bullwhip effect in the supply chain.

We investigate the effect of distance – political, economic, cultural and spatial, on developed-economy multinational enterprises’ (MNEs’) ownership decisions in cross-border (CB) acquisitions. We start with the premise that distance discourages full and majority ownership in CB acquisitions, and further investigate the moderating role of distance-reducing factors. We examine how the relationship between distance and acquisition ownership decision is moderated by firm-specific characteristics, such as firm size, general international experience, and specific host country experience. Our data sample consists of 1,041 CB acquisitions under taken by Finnish MNEs in 58 countries during the time period 1990–2010. We find substantial support for all our hypotheses and conclude that the negative effects of distance on CB acquisition equity stake are positively moderated by the three firm-specific resources but their individual importance is conditional on the host country type (developed or emerging).

The purpose of this study is to identify, based on social network theory, the relationship between the direction of international migration (immigration/emigration) and the international movement of enterprises and their location.

A traditional gravity model and the Tobit estimation method are applied to three groups of countries from three different regions: Latin America, North America and the European Union. The study considers a period from 2001 to 2012.

The main results suggest that the international migration that goes from the European Union and North America to Latin America is related with the firms’ internationalization and their respective location.

Given that migration can be an important and reliable source of information, trust and knowledge, managers should see it as a “bridge” between the home and host countries, which, in turn, can increase their competitive advantage.

Governments can learn how migration and outward foreign direct investment interact. In addition, they could develop political frameworks to accurately and effectively manage international migration (immigration and emigration) and FDI in the best interests of the stakeholders.

This study extends the social network theory by suggesting that networks are not only related with firms’ expansion abroad but as well with their location. This statement could be generalizable as long as emigration/networks (ethnic ties) are considered the links between the home and the host country.

According to AC 501, Accounting for ‘Secondary Tax on Companies (STC)’, a deferred tax asset for unused STC credits is recognised if it is probable that an entity will declare dividends against which unused STC credits can be used. This study examined the dividend declaration profile of companies recognising a deferred tax asset for unused STC credits to satisfy AC 501. In a literature review, the term ‘probable’ was analysed, showing that future dividend declarations are only regarded as ‘probable’ if their likelihood is 64% to 79%. A survey revealed that 45% of the surveyed companies with unused STC credits recognised a deferred tax asset for unused STC credits in their 2004 financial statements, and therefore believed they had satisfied the probability recognition criterion in AC 501. The survey also showed that companies that recognised a deferred tax asset have a dividend policy shareholders are familiar with, and most declare dividends annually. These two indicators can help assess the probability of future dividend declarations.

International harmonization of accounting standards and the move toward convergence have revived an increasing interest in the influence of culture in accounting and auditing. The growing number of countries adopting IFRS and the increasing acceptance of International Standards on Auditing (ISA) has further raised researchers’ attention. For example, more than 100 countries require or permit the use of IFRS, with more countries, such as Canada, India, and Korea, planning to adopt IFRS by 2011 (Deloitte Touche Tohmatsu, 2007; IASB, 2007a, 2007b). This move toward convergence is driven largely on assumptions and assertions based on enhancing international comparability of accounting and auditing information.

Over the last decade, international accounting harmonization and convergence with the increasing adoption of IFRS as national accounting standards have become dominant topics in international accounting research (Ashbaugh & Pincus, 2001; Chand & Patel, 2008; Christensen et al., 2007; Daske & Gebhardt, 2006; Daske et al., 2008; Ding et al., 2007; Hellmann et al., 2010; Lantto & Sahlström, 2008; Larson & Kenny, 2011; Peng & van der Laan Smith, 2010; Rezaee et al., 2010; Tyrrall et al., 2007). Given that the primary goal of international convergence is enhancing comparability of financial statements across countries, the influence of accountants’ professional judgment in the interpretation and application of accounting standards has increasingly been recognized as an important and controversial topic. Indeed, a growing number of studies have analyzed the influence of culture on standard setting (Bloom & Naciri, 1989; Ding et al., 2005; Schultz & Lopez, 2001), auditor independence (Agacer & Doupnik, 1991; Hwang et al., 2008; Patel & Psaros, 2000), and accountants’ values and judgments (Doupnik & Riccio, 2006; Doupnik & Richter, 2003, 2004; Patel, 2003). Although prior research has provided evidence that culture influences accountants’ exercise of professional judgments, these studies have largely focused on demonstrating differences between accountants from very distinct cultures or accounting systems. For example, Chand (2008) as well as Doupnik and Richter (2004) examined differences in the judgment of professional accountants with regard to the interpretation and application of uncertainty expressions by comparing Australian and Fijian and German and American accountants, respectively. Moreover, recent research on professional accountants’ judgments (Chand, 2008; Doupnik & Riccio, 2006; Doupnik & Richter, 2003) has largely focused on providing evidence that accountants from different accounting clusters significantly differ in their exercise of professional judgment. Indeed, researchers have often based their country selections on theoretical models of accounting clusters such as Gray's (1988) framework of accounting values or Nobes’ (1983) international accounting classification, predominantly to show differences between the Anglo-American accounting model and the Continental European accounting model.

This research monograph critically examines convergence with the adoption of International Financial Reporting Standards (IFRS) in Germany by taking into account the influence of political, legal, economic, social, cultural, and historical factors on accounting principles and practices. This study makes a contribution by examining issues in the convergence process that may create constraints in achieving global comparability and, importantly, may challenge the International Accounting Standards Board's (IASB) main objective: “to develop, in the public interest, a single set of high-quality, understandable, enforceable and globally accepted financial reporting standards based on clearly articulated principles” (IFRS Foundation, 2011a, Preface to IFRS).¹ Specifically, this research monograph examines convergence in Germany by analyzing the development of German accounting and examining issues and attitudes concerning the application of professional judgment, which has increasingly been recognized as an important and controversial topic in international accounting (Barth, Landsman, & Rendleman, 2000; Chand & White, 2006; Dechow, Myers, & Shakespeare, 2010; Patel, 2006; Theile, 2003).