An Extended Contingency Model of Environmental Factors Influencing National Accounting and Disclosure Practices

This paper outlines the development of an extended contingency model, proposed as a framework for analysis of the relationship between accounting and the environment in which accounting is practiced. The model is developed by enhancing the contextual contingency model proposed by the American Accounting Association (AAA) (1993). The AAA (1993) model, like other similar models that have been proposed, indicates the importance of environmental factors as influences upon accounting practices, but does not offer a method of identifying and classifying such factors. The enhancement to the model proposed in this paper is integration of an appropriately modified version of Gernon and Wallace’s (1995) accounting ecology. It is argued that with this extension the model can be used as a means of identifying and classifying environmental factors related to accounting and disclosure practices in prior research. Further, it is suggested that the factors likely to provide the most useful explanations of accounting development in future empirical research can be identified. 81