Case 1 (40 marks) Stone Corporation, headquartered in U.K., is a company producing health care products. Stone Corporation has subsidiaries in Japan and China. The company applies IFRS in preparing consolidated financial statements. The internal auditors have the responsibility to ensure the company's accounting policies have been applied consistently, and they are concerned that accounting practices might be affected by different culture across countries. Culture dimension scores developed by Hofstede for China, Japan and U.K. are reported in the table below. Country Power Individualism Masculinity Uncertainty Long Term Indulgence Distance Avoidance Orientation China 80 20 66 30 87 24 Japan 54 46 95 92 88 42 U.K. 35 89 66 35 51 89 Required: 1. Apply the theory proposed by Gray, predict the accounting values for the China, Japan and U.K. based on individualism. (10 marks) 2. Predict the accounting values for the China, Japan and U.K. based on uncertainty avoidance. (10 marks) 3. Are your predictions consistent in part 1 and part 2 above? What conclusions can you draw? (10 marks) 4. Stone Corporation is considering setting up a subsidiary in Hong Kong. Identify three factors that had the strongest influence on the development of accounting in Hong Kong. Explain. (10 marks)