The Two Hands of Guanxi


Speaker:Rachel Baskerville, Victoria University, Wellington, New Zealand
Date: Thursday 11 October 2012
Time: 16:00 - 17:30
Location: Laver 320

Further details

This study examines the extent to which IFRS can be observed to reflect societal (socioeconomic) values and norms specific to certain  jurisdictions. Based on the original TCE theories of Williamson, this study illustrates something already well known to non-UK/USA accounting researchers: that IFRS are cultural artefacts reflecting UK/USA socioeconomic assumptions. This is termed the Anglo-Saxon context, and is largely a market-oriented financial reporting environment, with regulatory systems underpinned by beliefs in the efficacy of "the Invisible Hand";  and classical/ neo-classical contracting theories.  This can be usefully, and at times sharply, distinguished from  economies dominated by relational transactions such as China, providing an illustration of this with the role and function of guanxi. The extent to which IFRS are culturally embedded is manifest in the 'cultural bias of IFRS' experienced by non-US/UK stakeholders. This study may alert regulators to possible underlying causes of some types of implementation issues when IFRS are transferred to other jurisdictions -  in particular fair value measurement -  where relational transactions remain dominant.