International standards on auditing in the international financial services centres

Abstract

Purpose-This paper aims to (1) investigate the position of International Financial Services Centres (IFSCs) in the International Federation of Accountants' countries' status on International Standards on Auditing's adoption and (2) assess the factors influencing ISA adoption in these Centres. Design/methodology/approach-This research drew its data from various sources, including the World Economic Forum dataset, the World Bank Report on Observation of Standards and Codes, the World Development Indicators and the Economic Intelligence Unit Report on Democracy Index on fifty countries classified as IFSCs. The adoption status is then regressed on a number of variables of interest. To establish that our results are robust, we used a combination of different regression techniques comprising OLS, multinomial and logistic regressions. Findings-In addition to GDP growth and education level, this paper adds new evidence to the literature by reporting the positive association between the level of democracy and the enforcement of securities' regulation on ISA adoption. It argues that political, economic, social and legal factors impact on ISA adoption in the IFSCs. Research limitations/implications-The sample size is limited to 50 from a population of 99 IFSCs because of lack of data. Some of the independent variables are basically archival data. Reliance is placed on WEF with regard to the measurement of protection of minority interest, securities and exchange regulations, and on Economic Intelligence Unit for democracy index. Practical implications-This paper stresses the importance of ISAs in IFSCs and the role of political power and the enforcement of securities laws on the adoption of ISA. Originality/value-This study fills the research gap relating to the absence of empirical studies on ISA adoption and its drivers in IFSCs.

Os Principais Assuntos de Auditoria Importam? Uma análise de sua associação com o Gerenciamento de Resultados

“…Isso aponta que o relatório dos auditores pode contribuir para uma maior percepção dos stakeholders em relação à previsibilidade de certos tipos de distorções. Por conseguinte, o ato de reportar PAAs atribui tanto à gestão quanto aos auditores responsabilidade para uma maior transparência, possibilitando que os usuários das informações decidam com maior assertividade, tendo uma asseguração razoável quanto à veracidade desse conteúdo(Brasel, Doxey, Grenier, & Reffett, 2016;Marques & Souza, 2017;Boolaky & Omoteso, 2016).De qualquer forma, nos estudos voltados para verificar a aceitação de tal norma pelos profissionais de auditoria, observa-se uma concordância por parte desse corpo de profissionais acerca da importância em se mencionar quais foram os assuntos mais relevantes. Desse modo, é possível, inclusive, reforçar as diferenças entre as responsabilidades da gestão e a responsabilidade de auditoria, além de explicar de qual maneira esse assunto mencionado foi tratado durante o trabalho de auditoria (Dantas,Barreto, & Carvalho, 2017).…”

Research on International Standards on Auditing: Literature synthesis and opportunities for future research

“…In general, this research stream concentrates on identifying the determinants of ISA adoption and commitment to ISA harmonization. For instance, Boolaky (2011), Boolaky and Cooper (2015), Boolaky and Omoteso (2016), and Boolaky and Soobaroyen (2017) empirically investigated the determinants of ISA adoption and commitment to harmonization on a cross-national basis. By contrast, Yapa, Ukwatte Jalathge, and Siriwardhane (2017) examined factors influencing the adoption of ISAs in a single…”

“…'SARS scores were higher in countries where ISAs had generally been adopted as the national standard but not in countries where ISAs were mandatory by law' (Boolaky & Cooper, 2015 p. 304). Boolaky and Omoteso (2016) continued to examine predictors of ISA adoption. They aimed to investigate the influence of international financial services centers (IFSCs) on the adoption of ISAs by countries belonging to the IFAC and assess the factors influencing ISA adoption in these centers.…”

“…They argued that political, economic, social, and legal factors impact on ISA adoption by IFSCs. Therefore, Boolaky and Omoteso (2016) highlighted that Gross Domestic Product (GDP) was the most significant…”

“…Researchers are increasingly focusing on International Standards on Auditing (ISAs), and prior research suggests that ISAs are as essential as International Financial Reporting Standards (IFRS) in ensuring that a country's financial system is sound and stable (Boolaky & Omoteso, 2016;Boolaky & Soobaroyen, 2017;Fraser, 2010). However, no comprehensive review of ISA research currently exists.…”