Accounting Case

Conservatism versus optimism - a preference for a cautious approach to measurement so as to cope with the uncertainty of future events, as opposed to a more optimistic, laissez faire, risk-taking approach. The U.S. being the latter, they are risk takers. They also posses a strong uncertainty avoidance which is why they always want quicker results and possess a more optimistic approach when it comes to conserving resources.

7. Secrecy versus Transparency - a preference for confidentiality and the restriction of disclosure of information about the business only to those who are closely involved with its management and financing, as opposed to a more transparent, open and publicly accountable approach. U.S. companies are usually very transparent and secrecy is low. Unlike many other cultures, U.S. companies are not concerned about sharing information with the public. This is a result of us being a low power distance society.

8. What triggered the Parmalat financial crisis? Parmalat defaulted on a $185 million bond payment in 2003. That prompted auditors and banks to scrutinize company accounts. Some 38% of Parmalat's assets were supposedly held in a $4.9 billion Bank of America account of a Parmalat subsidiary in the Cayman Islands. But on Dec. 19, Bank of America reported that no such account existed. In the ensuing investigation, Italian prosecutors say they've discovered that managers simply invented assets to offset as much as $16.2 billion in liabilities and falsified accounts over a 15-year period, forcing the $9.2 billion company into bankruptcy on Dec. 27. Trading in Parmalat shares was suspended the same day. (source Businessweek 2004)

The societal values that most contributed to Parmalat's falsified statements:

The Europeans were known for having weak uncertainty avoidance. In the wake of the financial scandals at Enron, WorldCom, and Tyco International,