Audit and Accounting Quality in an International Setting: Impact of Religion, Culture, Income and Legal Code on National Regulatory Efforts

• In Event: International Accounting 1

Abstract

Assuring the quality of international auditing and accounting is a partial function of the strength of national auditing and accounting enforcement efforts. Several potential determinants of the strength of these efforts were postulated in Kleinman, Lin and Palmon (2014). The postulated determinants include national culture, religion, source of auditing and accounting standards, and legal code origin. The authors, however, did not test the relationship of the postulated determinants to auditing enforcement efforts. This study undertakes this task, using the Brown, Preiato and Tarca (2014) measures of accounting and auditing enforcement efforts. We find that religion, culture, legal code and the economic variables of foreign direct investment as a percent of GDP and GNP per capita were determinants of either accounting or auditing enforcement efforts, and sometimes both. The implications of these findings are presented.

Authors

• Gary Kleinman, Montclair State University

• Beixin Betsy Lin, Montclair State University