Adoption of International Standards on Auditing (ISA): Do Institutional Factors Matter?
Adoption of International Standards on Auditing (ISA): Do Institutional Factors Matter?
Informed by the neo-institutional perspective, this study seeks for the first time to investigate empirically the determinants of ISA adoption and commitment to harmonisation on a cross-national basis (89 countries). The findings show that the protection of minority interests, regulatory enforcement, lenders/borrowers rights, foreign aid, prevalence of foreign ownership, educational attainment and particular forms of political system (level of democracy) prevailing in a country, are observed to be significant predictors of the extent of commitment to the adoption and harmonisation of ISAs. Our statistical analysis therefore suggests that coercive, mimetic and normative pressure have a significant impact on ISA adoption relative to economic (efficiency-led) factors. Our findings imply that current efforts by the International Federation of Accountants (IFAC) and other international agencies to implement ISAs need to recognise that a broad set of institutional factors, rather than narrow economic ones, are of relevance in the development of audit policymaking, practice and regulation worldwide.
accounting, International Standards on Auditing, neo-institutional theory
59-81
Boolaky, Pran K.
74cb3e9a-327f-47ad-9735-c9dce309c33a
Soobaroyen, Teerooven
6686e2f8-564f-4f7f-b079-9dc8a2f53a48
12 February 2017
Boolaky, Pran K.
74cb3e9a-327f-47ad-9735-c9dce309c33a
Soobaroyen, Teerooven
6686e2f8-564f-4f7f-b079-9dc8a2f53a48
Boolaky, Pran K. and Soobaroyen, Teerooven
(2017)
Adoption of International Standards on Auditing (ISA): Do Institutional Factors Matter?
International Journal of Auditing, 21 (1), .
(doi:10.1111/ijau.12081).
Abstract
Informed by the neo-institutional perspective, this study seeks for the first time to investigate empirically the determinants of ISA adoption and commitment to harmonisation on a cross-national basis (89 countries). The findings show that the protection of minority interests, regulatory enforcement, lenders/borrowers rights, foreign aid, prevalence of foreign ownership, educational attainment and particular forms of political system (level of democracy) prevailing in a country, are observed to be significant predictors of the extent of commitment to the adoption and harmonisation of ISAs. Our statistical analysis therefore suggests that coercive, mimetic and normative pressure have a significant impact on ISA adoption relative to economic (efficiency-led) factors. Our findings imply that current efforts by the International Federation of Accountants (IFAC) and other international agencies to implement ISAs need to recognise that a broad set of institutional factors, rather than narrow economic ones, are of relevance in the development of audit policymaking, practice and regulation worldwide.
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Accepted/In Press date: 20 September 2016
e-pub ahead of print date: 25 December 2016
Published date: 12 February 2017
Keywords:
accounting, International Standards on Auditing, neo-institutional theory
Identifiers
Local EPrints ID: 413170
URI: http://eprints.soton.ac.uk/id/eprint/413170
ISSN: 1090-6738
PURE UUID: 58e72cdf-3656-4c19-8905-31d9b870f8b0
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Date deposited: 17 Aug 2017 16:30
Last modified: 16 Mar 2024 04:03
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Author:
Pran K. Boolaky
Author:
Teerooven Soobaroyen
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