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Diffusion theory, transnational antecedents and International Standards on Auditing adoption around the world

Ibrahim K. Elmghaamez, Mohamed Elmagrhi Orcid Logo

International Journal of Auditing, Volume: 26, Issue: 2, Pages: 1 - 48

Swansea University Author: Mohamed Elmagrhi Orcid Logo

  • Accepted Manuscript under embargo until: 17th January 2024

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DOI (Published version): 10.1111/ijau.12273

Abstract

This paper investigates the impact of four key transnational factors (i.e., cultural, educational, legal, and political factors) on the diffusion and early adoption of International Standards on Auditing (ISAs). Using data for 162 countries over 1995-2014 (i.e., 3,240 observations) and drawing on di...

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Published in: International Journal of Auditing
ISSN: 1090-6738 1099-1123
Published: Wiley 2022
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URI: https://cronfa.swan.ac.uk/Record/cronfa59054
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Abstract: This paper investigates the impact of four key transnational factors (i.e., cultural, educational, legal, and political factors) on the diffusion and early adoption of International Standards on Auditing (ISAs). Using data for 162 countries over 1995-2014 (i.e., 3,240 observations) and drawing on distinctive insights from diffusion theory, we found that common law countries tend to adopt ISAs faster than civil law countries. Our findings also show that vigorous legal enforcement and shareholder protection regimes promote the early adoption of ISAs, while robust judicial efficiency systems constrain the early adoption of ISAs. In addition, our results show that higher literacy rates and educational attainment simulate the earlier diffusion of ISAs. We also find that higher levels of individualism and uncertainty avoidance, but low levels of power distance cultural values boost the early adoption of ISAs. Finally, our results report that countries with strong political stability and control of corruption tend to adopt ISAs faster than those with solid government effectiveness.
Keywords: auditing history; auditing standards; cultural dimensions; diffusion theory; educational factors; legal factors; political factors; regulation
College: School of Management
Issue: 2
Start Page: 1
End Page: 48