Based on the Pre IFRS values, it could be argued that Great Britain and France, in the aftermath of the Second World War were more focused on long term orientation, and uncertainty avoidance, they did not want to risk chances (Appendix C). Although there was some amount of power distance, they still focused on accounting values that were balanced for all investors, local and international trades. Even now companies of the United States still view the United Kingdom as a gateway into broader US markets. However, this was not observed in the case of China, where the open-door policy still lead to issues as foreign investors were often left in doubt about the company’s actual financial portfolio.
PRE-IFRS accounting values and the Gray Model:
Based on the Pre IFRS elements and the cultural dimensions as understood through the Hofstede, it can be said that France has more professionalism over statutory control (Appendix D). According to Gray when a country ranks high up in terms of individualism and low in terms of uncertainty avoidance and power distance, then it can be ranked to be highly professional. In that context, Both France and Great Britain are both highly professional. On the other hand, China with more rigid set of rules is ranked as being under statutory control.
The second hypothesis of Gray is that when a country is ranked high in terms of uncertainty avoidance and power distance and low in terms of individualism, then it would be ranked highly in uniformity. Now France and Britain are ranked quite low when compared relatively with China, and low in terms of power distance too, so they are more flexible. On the other hand, China is more uniform.
The third hypothesis of Gray postulates that when a country is higher in terms of uncertainty avoidance and lowers in terms of individualism and masculinity, it would rank with conservatism. Since France and Great Britain do not meet this criterion, they can be ranked as being more optimistic whereas China is more conservative.
Finally, the last criteria postulates that when a country is ranked high in terms of uncertainty avoidance and power distance but lower when it comes to individualism and masculinity, then they are more secretive. Once again, China meets this criterion and hence falls under secrecy whereas United Kingdom and France come under Transparency.