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

Vincent Adela (Department of Accounting, School of Business, University of Cape Coast, Cape Coast, Ghana)
Mac Junior Abeka (Department of Finance, School of Business, University of Cape Coast, Cape Coast, Ghana)
George Tackie (Department of Accounting, School of Business, University of Cape Coast, Cape Coast, Ghana)
Comfort Ama Akorfa Anipa (Department of Accounting, School of Business, University of Cape Coast, Cape Coast, Ghana)
Deborah Esi Gyanba Mbir (Department of Accounting, School of Business, University of Cape Coast, Cape Coast, Ghana)
Cornelius Adorm-Takyi (Department of Accounting, School of Business, University of Cape Coast, Cape Coast, Ghana)

Journal of Accounting in Emerging Economies

ISSN: 2042-1168

Article publication date: 19 December 2022

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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

Citation

Adela, V., Abeka, M.J., Tackie, G., Anipa, C.A.A., Mbir, D.E.G. and Adorm-Takyi, C. (2022), "Institutional structures and strength of auditing and financial reporting standards in Africa", Journal of Accounting in Emerging Economies, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JAEE-02-2022-0066

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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