Determining the strength of auditing standards and reporting

Abstract

This study devises a model to evaluate the strength of auditing standards and reporting (SARS) in individual countries. Drawing from data collected by the World Economic Forum the model’s predictive capabilities are tested in the geographical region of sub-Saharan Africa. Data from 28 countries was utilised. The predictive powers of the model are significant. Eight of the thirteen variables utilised were found to be significant predictors of a country’s SARS. Corporate governance variables and shareholder protection variables were found to be particularly prominent. Evaluation of the results also demonstrates that a country’s SARS does not appear to be linked to adoption of international standards of auditing. This suggests standardised adoption of ISAs will not necessarily lead to uniformly strong and consistent audit reporting regimes across countries

Comparing the Strength of Auditing and Reporting Standards and Investigating their Predictors in Europe and Asia

“…Many countries claim to have adopted and implemented International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA) but there are differences in application across these countries (Boolaky and O'Leary ). This is evidenced in two reports, namely the Report of the International Federation of Accountants (), which classifies countries based on differences in ISA adoption and implementation and the Deloitte IFRS Survey (), which classifies countries based on the adoption and use of IFRS.…”

“…The efficacy of the corporate board is defined as the level of accountability by management to the investors and the board, and the extent to which the boards and investors exert strong supervision of management decisions (WEF 2009: 363). Arguably, if the efficacy of the board is strong, it will tend to increase the SARS score (Boolaky and O'Leary ). On the other hand, Felo () suggests that ethical firms signal the commitment of management to better financial reporting.…”

Do Auditing and Reporting Standards Affect Firms’ Ethical Behaviours? The Moderating Role of National Culture

“…One of the main issues is whether or not the adoption of international auditing and reporting standards results in uniformly strong governance (Boolaky and O'Leary 2011). Variation in the application of accounting standards can be expected as consequence of differences in local business environment and in the institutional structure of a country (Chen et al 2010).…”

The Perceptions and Determinants of Auditing and Reporting Quality in the Asia‐Pacific Region

“…Our findings are wider in scope because we rely on actual country‐level data to explain the determinants of accounting quality. The most recent studies using such data and ARQ are that of Boolaky and O'Leary (), Boolaky () and Boolaky and Cooper (), but they do not explicitly rely on any theory as we have done in the present study, whilst drawing upon more recent data. Consequently, this paper contributes to the literature on cross‐national studies of accounting quality (Leuz et al.…”