Macquarie University
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The influence of contextual factors on professional accountants’ judgments in Indonesia

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posted on 2022-03-28, 10:09 authored by Sany Dwita
Using Indonesia as a case study, this PhD thesis aims to contribute to the literature by critically examining the influence of relevant contextual factors including Islam and dominant indigenous values (adat) on various issues related to global convergence and accountants' professional judgments.The forces of globalization and the convergence of financial reporting with the adoption of global accounting standards have attracted increasing interest on the influence of social, political and economic factors including culture on accounting. Although prior research has examined various countries’ experiences with global convergence, only few studies have rigorously examined issues related to globalization, convergence and accounting practices in non-Anglo-American context especially in Islamic countries. This is surprising since it is increasingly acknowledged that Islam poses challenges to globalization and convergence of financial reporting. This is especially related to the requirement for compliance with Islamic law (Sharia) in religious (ibadah) and secular aspects (muamalat) of life including commercial activities and, indeed, financial reporting. Moreover, there is a growing movement towards ―Islamic convergence‖ in the recent years, which is primarily driven by the significant growth of Islamic Financial Institutions (IFIs) and the issuance of accounting, auditing and Sharia standards for IFIs by international standards setting body, namely, Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The Islamic convergence is recognized as an effort to resist globalization that has been severely criticized as the promotion of Anglo-American dominance and values which are inconsistent with Islam and Sharia. As such, using Indonesia as a case study, this PhD thesis aims to contribute to the literature by critically examining the influence of relevant contextual factors including Islam and dominant ndigenous values (adat) on various issues related to global convergence and accountants’ professional judgments. Indonesia provides an appropriate context to examine various issues related to global convergence and Islam. Indonesia is the largest Islamic country in the world where Islam is the religion of 87 percent of its population of 253 million. Indonesia has joined the convergence movement with the adoption of the Code, IFRS and ISA in 2010, 2012 and 2013, respectively. Indonesia hasalso applied a separate set of Sharia Accounting Standards for financial reporting of IFIs in the country. Both global convergence and Islamic convergence of financial reporting are simultaneously reinforced and applied in the context of Indonesia. Moreover, Indonesia is also characterized by ethnic diversity with over 300 ethnic groups such as the Javanese, Minangkabau, Sundanese, Batak, Bugis and Banjar with the Javanese comprising almost half of the population. These ethnic groups are distinguished by language, custom and social organizations including gender role, known as adat. These ethnic groups also largely vary in respect of the Islamic influence on their adat. Given the diversity, the context of Indonesia provides an appropriate setting for examining various issues related to Islam, judgments and gender (―al-jins al-bashari‖). For example, although the Javanese are dominated by Islam, the Islamic beliefs and practices of nearly two-thirds of the ethnic Javanese are so diluted with Hinduism and animism that they practically form a separate religion. By contrast, the matrilineal Minangkabau have been regarded as devout Muslims. Moreover, the Javanese gender-roles focus on hierarchy and ―women’s nature‖ (Kodrat Wanita) which indicates male domination of the outside world of politics and work with females confined to domestic activities, obedience and passiveness. Therefore, the idea of gender equality was largely alien in among the Javanese. In contrast, the Minangkabau emphasis is on women as central focus of inheritance and kinship. Women enjoy respect and high status, and participate as actively in decision making as their male counterparts, and thus the idea of gender equality is more readily accepted in Minangkabau. The different views on gender roles are more likely to cause differences in gender-based judgments between these different ethnic groups. As such, the context of Indonesia provides challenges on the simplistic assumption of homogeneity in values and judgments of accountants across Islamic countries that have largely dominated literature in Islamic context.


Table of Contents

Chapter 1. Overview of the thesis -- Chapter 2. Contextual factors influencing global convergence of financial reporting : the case of Indonesia -- Chapter 3. Professional accountants' preferences for the application principles- versus rules-based standards in Indonesia -- Chapter 4. Gender-based auditors' judgments in Indonesia -- Chapter 5. Conclusions.


Includes bibliographical references Thesis by publication.

Awarding Institution

Macquarie University

Degree Type

Thesis PhD


PhD, Macquarie University, Faculty of Business and Economics, Department of Accounting and Corporate Governance

Department, Centre or School

Department of Accounting and Corporate Governance

Year of Award


Principal Supervisor

Chris Patel

Additional Supervisor 1

Rahat Munir

Additional Supervisor 2

Hector Perera


Copyright Sany Dwita 2014. Copyright disclaimer:






1 online resource (xviii, 303, 2, 8, 6 pages) tables

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