We examine the relation between dimensions of national culture identified
by (Hofstede, 2001), and earnings quality of banks, using a sample of
banks from 36 countries. Our main analysis, which focuses on period 2000
– 2014. The research methodology on the use of two different models ,the
first dealing with the Real Earnings Management. The second deals with
the Accounting Earnings Management models. Indicates that banks in
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high individualism, high masculinity, and low uncertainty avoidance
societies, manage earnings to just-meet-or-beat the prior year's earnings.
In tests of income smoothing, we find that firms in high individualism,
high power distance, and low uncertainty avoidance societies report
smoother earnings. The study also recommended the need to reconsider
the accounting theory, the need to develop a standard for accounting, takes
into account the impact of different national culture on bank earnings
quality.