Accounting and corruption: a cross‐country analysis

Accounting and corruption: a cross‐country analysis Purpose – The purpose of this paper is to better understand the relationship between accounting and auditing quality and the perceived level of corruption. Design/methodology/approach – This relationship is studied by performing a cross‐country analysis using public data to measure accounting quality, audit quality, and corruption. Findings – Consistent with the authors' predictions, the paper finds evidence that accounting and auditing quality are significantly related to the level of perceived corruption in a country. Research limitations/implications – These findings suggest that countries with more transparent reporting have lower levels of perceived corruption and that the level of perceived corruption may be reduced in a country by improving accounting and auditing quality. Practical implications – The findings suggest that countries can reduce the level of perceived corruption by improving the transparency of financial reporting by improving accounting and auditing standards. Originality/value – While significant amounts of research has examined perceived corruption, this study is the first to address the impact of high‐quality accounting information on the level of perceived corruption. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Money Laundering Control Emerald Publishing

Accounting and corruption: a cross‐country analysis

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Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
1368-5201
DOI
10.1108/13685201011083885
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to better understand the relationship between accounting and auditing quality and the perceived level of corruption. Design/methodology/approach – This relationship is studied by performing a cross‐country analysis using public data to measure accounting quality, audit quality, and corruption. Findings – Consistent with the authors' predictions, the paper finds evidence that accounting and auditing quality are significantly related to the level of perceived corruption in a country. Research limitations/implications – These findings suggest that countries with more transparent reporting have lower levels of perceived corruption and that the level of perceived corruption may be reduced in a country by improving accounting and auditing quality. Practical implications – The findings suggest that countries can reduce the level of perceived corruption by improving the transparency of financial reporting by improving accounting and auditing standards. Originality/value – While significant amounts of research has examined perceived corruption, this study is the first to address the impact of high‐quality accounting information on the level of perceived corruption.

Journal

Journal of Money Laundering ControlEmerald Publishing

Published: Oct 12, 2010

Keywords: Corporate governance; Accounting systems; Auditing; Corruption

References

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