Social identity and IPSAS adoption: cross-national evidence

IMPACT

The authors explain why policy-makers and regulators in countries with diverse populations should be considering ways to encourage IPSAS adoption. A cross-country dataset of 106 countries was used to demonstrate the negative impact of cultural diversity and IPSAS adoption. Cross-pollination of ideas in ethnically diverse societies should be used to develop mechanisms that enhance communication across different ethnic groups. Policy-makers should consider the differences in language and communication styles that can obstruct knowledge transfer.

ABSTRACT

This study examines the relationship between social identity theory (SIT) and the extent to which adoption of International Public Sector Accounting Standards (IPSAS) is affected by diversity within countries. Data from 106 countries was used to examine the relationship between two SIT constructs and the level of IPSAS adoption. Diversity of cultural values was found to be important in explaining the differences among countries in their adoption of IPSAS. The findings did not support institutional and economic variables influencing adoption but, instead, demonstrated that SIT constructs have additional explanatory power. Empirical studies exploring the combination of diversity variables and IPSAS are lacking—therefore, this study contributes to other institutional dimensions that have been previously researched and adds to the literature in comparative studies in public sector accounting.

KEYWORDS:

• Ethnolinguistic fractionalization
• governmental accounting culture
• innovation and diversity
• International Public Sector Accounting Standards (IPSAS)
• national identity
• social identity theory (SIT)

Acknowledgements

We thank Professor Andreas Bergmann (PMM’s Editor in Chief) and the journal’s two anonymous referees for very helpful comments and suggestions. We also acknowledge the helpful discussion and materials of Professor Adam Mohamed Ali Fadlalla, Professor Mostafa Kamal Hassan, Professor Habib Mahama, Professor Mauricio Gomez Villegas, Professor Giuseppe Grossi, Professor Pawan Adhikari, Dr Tobias Polzer, Dr Jens Heiling, Dr Josette Caruana and Michaela Lavender (PMM’s Managing Editor)

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Mustafa Elkasih Abdulkarim

Mustafa Elkasih Abdulkarim is an Assistant Professor of Accounting at the College of Business and Economics at Qatar University, Qatar. His main expertise focuses on the public sector change aspects of accounting. Currently, he is interested in carrying out research in the area of risk governance, organizational culture, reform in public sector and international public sectors accounting standards.

Mohamed Ismail Umlai

Mohamed Ismail Umlai is a PhD candidate with a specialization in finance at the College of Business and Economics at Qatar University, Qatar. His prior academic experience includes a bachelor’s and master’s in accounting and finance. He has published several papers in peer reviewed journals and has a strong research interest in public sector accounting, sustainability and Shariah law compliance.