Accounting and corruption: a cross‐country analysis

Abstract

Purpose

The purpose of this paper is to better understand the relationship between accounting and auditing quality and the perceived level of corruption.

Design/methodology/approach

This relationship is studied by performing a cross‐country analysis using public data to measure accounting quality, audit quality, and corruption.

Findings

Consistent with the authors' predictions, the paper finds evidence that accounting and auditing quality are significantly related to the level of perceived corruption in a country.

Research limitations/implications

These findings suggest that countries with more transparent reporting have lower levels of perceived corruption and that the level of perceived corruption may be reduced in a country by improving accounting and auditing quality.

Practical implications

The findings suggest that countries can reduce the level of perceived corruption by improving the transparency of financial reporting by improving accounting and auditing standards.

Originality/value

While significant amounts of research has examined perceived corruption, this study is the first to address the impact of high‐quality accounting information on the level of perceived corruption.

Citation

Malagueño, R., Albrecht, C., Ainge, C. and Stephens, N. (2010), "Accounting and corruption: a cross‐country analysis", Journal of Money Laundering Control, Vol. 13 No. 4, pp. 372-393. https://doi.org/10.1108/13685201011083885