Diffusion theory, economic consequences, and adoption of international standards on auditing around the world
Diffusion theory, economic consequences, and adoption of international standards on auditing around the world
This paper examines the economic consequences of adopting the International Standards on Auditing (ISAs) from a diffusion of innovation theory perspective. Using one of the most extensive datasets employed to date (i.e., 160 countries over 20 years and generating 3,200 country-year observations), this study examines the impact of ISAs adoption on the economic consequences of adopting nations. Our findings are threefold. First, our findings show that early ISAs adoption has positively and significantly influenced three economic indicators of the adopting countries: (i) economic growth; (ii) foreign direct investment (FDI) inflows; and (iii) exchange rate. Second, our results show that late ISAs adoption has positively and significantly influenced two economic indicators: (i) exports; and (ii) interest rates; but negatively with imports. Third, our study finds a significant positive association between ISAs adoption with amendments or translation and two economic indicators: (i) FDI; and (ii) exchange rate, but negatively with inflation. Finally, and by contrast, we find a negative link between early ISAs adoption and economic growth rate, as well as exports. Our findings have implications for theory and practice.
International auditing standards, Diffusion of innovation theory, economic consequences, ISAs adoption
Elmghaamez, Ibrahim
c2c3497c-8172-48ea-9e31-b713713dc86a
Ntim, Collins
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Yekini, Kemi
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Elmghaamez, Ibrahim
c2c3497c-8172-48ea-9e31-b713713dc86a
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b
Yekini, Kemi
f86a3e49-0caa-47bb-a469-94745c5fba0b
Elmghaamez, Ibrahim, Ntim, Collins and Yekini, Kemi
(2023)
Diffusion theory, economic consequences, and adoption of international standards on auditing around the world.
Journal of International Accounting, Auditing and Taxation.
(In Press)
Abstract
This paper examines the economic consequences of adopting the International Standards on Auditing (ISAs) from a diffusion of innovation theory perspective. Using one of the most extensive datasets employed to date (i.e., 160 countries over 20 years and generating 3,200 country-year observations), this study examines the impact of ISAs adoption on the economic consequences of adopting nations. Our findings are threefold. First, our findings show that early ISAs adoption has positively and significantly influenced three economic indicators of the adopting countries: (i) economic growth; (ii) foreign direct investment (FDI) inflows; and (iii) exchange rate. Second, our results show that late ISAs adoption has positively and significantly influenced two economic indicators: (i) exports; and (ii) interest rates; but negatively with imports. Third, our study finds a significant positive association between ISAs adoption with amendments or translation and two economic indicators: (i) FDI; and (ii) exchange rate, but negatively with inflation. Finally, and by contrast, we find a negative link between early ISAs adoption and economic growth rate, as well as exports. Our findings have implications for theory and practice.
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Accepted/In Press date: 14 October 2023
Keywords:
International auditing standards, Diffusion of innovation theory, economic consequences, ISAs adoption
Identifiers
Local EPrints ID: 483874
URI: http://eprints.soton.ac.uk/id/eprint/483874
ISSN: 1061-9518
PURE UUID: 8acf57bb-fb1f-4532-b19b-88b7a866e00a
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Date deposited: 07 Nov 2023 17:58
Last modified: 18 Mar 2024 02:27
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Contributors
Author:
Ibrahim Elmghaamez
Author:
Kemi Yekini
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