ABSTRACT
This chapter explores the topic of the impact of cultural determinants on the quality of earnings. Modern business entities operate in a dynamically changing and highly complex environment, which makes identifying cultural determinants that affect the quality of the earnings quite challenging. Moreover, conducting cross-cultural empirical research faces a number of difficulties. The conducted empirical study on the impact of cultural determinants on the quality of earnings was based on the attributes of earnings. Cultural determinants, in light of the research conducted, provide contradictory results regarding their impact on the quality of earnings. The cultural factor is certainly important – and should be considered when auditing financial statements. The studies conducted so far have generally addressed the impact of cultural determinants on the management of earnings, while much less research has dealt with other attributes of the quality of earnings – persistence, predictability, and smoothing.
