A theoretical construct of the impact of religious beliefs on accounting practices in the indian and global context

Abstract

It is a known fact that the spirit of accounting for maximizing wealth of the shareholder could lead accountants to create some scandals like Enron and Anderson. It is said that scandals occur due to the effect of capitalism, individualism, materialism and secularism embodied in accounting. Accounting itself has spiritual values including honesty, trust, responsibility, accountability, objectivity, equality, independence, fairness, humility and motivation building. These values could be implemented together in everyday life as a basis of actions and accounting practices. The present study is about analyzing the effect of different religious beliefs including Hinduism, Islamism and Christianity on accounting practices.

The result of the exploration clearly reflects that accounting itself has spiritual values with religious beliefs engulfed in it including honesty, trust, responsibility, accountability, objectivity, independence, equality, fairness, humility and motivation building. These values could be implemented together in everyday life as a basis of actions and accounting practices. It is observed that religious beliefs and practices still occupy a prominent place in traditional as well as modern establishments. Traders believe that pleasing their gods in a traditional way is more important than any form of CSR activities for bringing good luck, fortune and profitability to their concerns. The current accounting system is deemed to be a result of the overall process of hybridization where many institutional and cultural factors may have played a major role in shaping accounting practices rather than religious beliefs.

Introduction

To consider the effect of religion as a cultural factor on accounting is a relatively new aspect of study (Belkaoui, 1990; Belkaoui, 1983; Coates, 1987; Culpan, 1991; Gambling, 1986; Gambling, 1987; Gambling, 1993; Gray, 1988; Perera, 1989 a, b; Perera, 1990; Perera, 1994; Thomas, 1989; Turner, 1983; Violet, 1983). A study of such a relationship may allow one to unveil many unanswered questions about the culture/accounting relationship. Unquestionably, religion must be given the status of being a powerful force underlying human behaviour and thus culture may be viewed as an important influence on the development of accounting policy and practice.

Businesses have developed globally and multinational companies are dominating the economy, thus increasing the importance of strengthening confidence in the accounting profession worldwide. The internationalization of the accounting profession requires convergence in terms of the technical aspects of the profession and in training and ethical aspects.

A list of factors, including the legal system, economic and political setup, taxation, international factors, business ownership, type of businesses and culture, just to name some, have been discussed in the accounting literature that varies from one country to another and have been affecting the global wave of government accounting reforms across the world over time. As a result, significant contrasts and heterogeneities prevail in accounting practices across countries leading to the conclusion that accounting is context-dependent (Carmona and Ezzamel, 2006). However, the role of religion in shaping accounting practices has not received sufficient attention from academic researchers and practitioners. Religion is a strong foundation for ethical decision making influencing the expected behaviour of individuals thus defining the code of conduct.

The present study is divided into five sections: the first part covers the introduction; the second part is the literature review; the third part deals with methodology and objectives; the fourth part discusses the effect of different religious values and thoughts on accounting practices and integration of these religious thoughts within the accounting practices. The final part discusses the findings, suggestions and conclusion. The findings of the study are used to determine how religious factors affect accounting practices of a specific cultural environment, mainly Hinduism, Islamism and Christianity.

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Authors Information:

Sana Moid is Assistant Professor at the Amity Business School, Amity University, Lucknow. She is pursuing her PhD in Management (Topic: Measuring Customer Satisfaction with Service Quality in Tourism Industry in Uttar Pradesh) from Integral University, Lucknow. Her research interests include Service Quality in the Tourism Industry, Forensic Accounting, Microfinance and Women Entrepreneurship. She has authored over 8 research papers published in reputed peer reviewed indexed journals and is an active member of Indian Accounting Association and Indian Commerce Association. She has actively participated in FDPs and National and International Seminars. Her total teaching experience is 6 years in addition to 3 years research experience as a research scholar. She has qualified NET in management. Her research interest includes Finance (Investment Trends, Creative/ Forensic Accounting), Marketing (Service Quality Measurement in the Tourism Sector) and Women Entrepreneurship. She can be reached at smoid@lko.amity.edu or sanamoid14@gmail.com

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