The role of accounting standards and disclosure in alleviating corruption: a cross-country study
by Md. Atiqur Rahman
International Journal of Managerial and Financial Accounting (IJMFA), Vol. 16, No. 4, 2024

Abstract: This study, relying on the notion of agency theory that the presence of information asymmetry causes higher agency costs, investigates the impact of financial disclosure and perceived strength of auditing and reporting standards on perceived corruption. Using data for 71 economies for the period 2010-2017 and utilising pooled ordinary least square (POLS) and two-step system GMM methods, this study finds that both financial disclosure and perceived strength of accounting and auditing standards significantly reduce perceived corruption. Moreover, developing/transition and common law countries may benefit more from better financial disclosure and perceived strong standards, but highly corrupt countries do not benefit from higher disclosure. Additional analysis shows that impact of perceived strong accounting standards on corruption is nonlinear. Audit propensity and quality moderates the relationship between the independent variables and perceived corruption. Mere adoption of accounting/auditing standards cannot cut corruption and perceived standard strength may be influenced by enforcement of standards.

Online publication date: Tue, 01-Oct-2024

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Managerial and Financial Accounting (IJMFA):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com