Accounting and corruption: a cross‐country analysis
- 12 October 2010
- journal article
- Published by Emerald in Journal of Money Laundering Control
- Vol. 13 (4), 372-393
- https://doi.org/10.1108/13685201011083885
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.Keywords
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