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IFRS Adoption, Extent of Disclosure, and Perceived Corruption: A Cross-Country Study

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  • Houqe, Muhammad Nurul
  • Monem, Reza M.

Abstract

We investigate whether IFRS adoption and the extent of disclosure in a country play any role in reducing perceived corruption, after controlling for the effects of political institutions and economic development. The sample covers 104 countries over the period 2009–2011. We find strong evidence that the length of IFRS experience and the extent of disclosure are negatively related to perceived corruption in a country. We also find that relative to developed countries, developing countries benefit more from IFRS experience in lowering perceived corruption. Our results are robust to several sensitivity tests, including alternative models, alternative measures of perceived corruption, and controlling for endogeneity. Our findings are important because critics have questioned the merit of IFRS adoption by developing countries with weak institutional settings.

Suggested Citation

  • Houqe, Muhammad Nurul & Monem, Reza M., 2016. "IFRS Adoption, Extent of Disclosure, and Perceived Corruption: A Cross-Country Study," The International Journal of Accounting, Elsevier, vol. 51(3), pages 363-378.
    • Handle: RePEc:eee:accoun:v:51:y:2016:i:3:p:363-378
    DOI: 10.1016/j.intacc.2016.07.002
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    12. Rahman, Asheq R., 2016. "Discussion on “IFRS Adoption, Extent of Disclosure, and Perceived Corruption: A Cross-country Study”," The International Journal of Accounting, Elsevier, vol. 51(3), pages 379-381.
    13. Houqe, Muhammad Nurul & Monem, Reza M., 2016. "Reply to the Discussion of “IFRS Adoption, Extent of Disclosure, and Perceived Corruption: A Cross-Country Study”," The International Journal of Accounting, Elsevier, vol. 51(3), pages 382-384.
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    18. Frederick Kibon Changwony & Anthony Kwabena Kyiu, 2024. "Business strategies and corruption in small‐ and medium‐sized enterprises: The impact of business group affiliation, external auditing, and international standards certification," Business Strategy and the Environment, Wiley Blackwell, vol. 33(1), pages 95-121, January.
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    20. Mazzi, Francesco & Slack, Richard & Tsalavoutas, Ioannis, 2018. "The effect of corruption and culture on mandatory disclosure compliance levels: Goodwill reporting in Europe," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 31(C), pages 52-73.
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    More about this item

    Keywords

    Corruption perception; IFRS; Extent of disclosure; Accounting environment; Political institutions; Economic development;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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