Institutional structures and strength of auditing and financial reporting standards in Africa

Vincent Adela, Mac Junior Abeka, George Tackie, Comfort Ama Akorfa Anipa, Deborah Esi Gyanba Mbir and Cornelius Adorm-Takyi

Journal of Accounting in Emerging Economies, 2022, vol. 13, issue 5, 1000-1024

Abstract: Purpose - The purpose of this paper is to investigate the effect of institutional structures on the strength of auditing and financial reporting standards. Design/methodology/approach - This paper employs a panel data of 36 African countries over the period 2000–2018. System generalised method of moments (SGMM) was employed to estimate the relationship between institutional structures and the strength of auditing and financial reporting standards in Africa. Findings - The findings of this paper indicate a positive and statistically significant relationship between institutional structures and the strength of auditing and financial reporting standards. As a further analysis, the study finds that the relationship between institutional structures and the strength of auditing and financial reporting standards is stronger for economies with common-law accounting traditions than those with civil-law origin. Practical implications - The paper has important implications for countries striving to adopt and implement auditing and financial reporting standards fully. Such efforts must begin with establishing strong institutional structures in those countries. Originality/value - This study presents the first empirical panel data evidence on the effect of institutional structures on the strength of auditing and financial reporting standards in Africa. Further, the methodology employed in this study can be regarded as effective in testing the phenomenon in other regions, or it can be employed as a guiding model for future research in the area.

Keywords: Institutional structures; Auditing; Financial reporting; Standards; Accounting; IFRS; Africa (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaeepp:jaee-02-2022-0066

DOI: 10.1108/JAEE-02-2022-0066

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