Title: Corruption and the environment of accounting and auditing in Africa

Authors: Akintola Owolabi

Addresses: Lagos Business School, Pan-African University, Km 22 Lekki-Epe Expressway, Ajah, P.O. Box 73688, Victoria Island, Lagos, Nigeria

Abstract: This paper empirically investigates the relationship between the level of corruption in 13 Anglophone African countries and their environment of accounting and auditing. Ten significant variables used by the World Bank in its Report on the Observance of Standards and Codes: accounting and auditing in African countries between 2001 and 2007 were developed into a composite accounting/auditing environment variable (ROSC), measured for each country and ranked. Corruption Perception Index (CPI) for the same period was obtained (Transparency International) for each country and ranked. The empirical result using Spearman|s rank correlation indicates the existence of a positive relationship between accounting/auditing environment and corruption (correlation coefficient rs of 0.32), but the strength of the relationship is weak (at 0.05 level of significance). The quality of accounting and auditing as represented by their environment is a stimulus that could mitigate the impact of corruption. Institutions should be strengthened to achieve this.

Keywords: corruption; accounting standards; auditing standards; financial reporting; social accounting; Africa.

DOI: 10.1504/IJCA.2011.039752

International Journal of Critical Accounting, 2011 Vol.3 No.2/3, pp.220 - 234

Published online: 18 Apr 2011 *

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