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Corruption and the environment of accounting and auditing in Africa

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  • Akintola Owolabi

Abstract

This paper empirically investigates the relationship between the level of corruption in 13 Anglophone African countries and their environment of accounting and auditing. Ten significant variables used by the World Bank in its Report on the Observance of Standards and Codes: accounting and auditing in African countries between 2001 and 2007 were developed into a composite accounting/auditing environment variable (ROSC), measured for each country and ranked. Corruption Perception Index (CPI) for the same period was obtained (Transparency International) for each country and ranked. The empirical result using Spearman's rank correlation indicates the existence of a positive relationship between accounting/auditing environment and corruption (correlation coefficient rs of 0.32), but the strength of the relationship is weak (at 0.05 level of significance). The quality of accounting and auditing as represented by their environment is a stimulus that could mitigate the impact of corruption. Institutions should be strengthened to achieve this.

Suggested Citation

  • Akintola Owolabi, 2011. "Corruption and the environment of accounting and auditing in Africa," International Journal of Critical Accounting, Inderscience Enterprises Ltd, vol. 3(2/3), pages 220-234.
    • Handle: RePEc:ids:ijcrac:v:3:y:2011:i:2/3:p:220-234
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    Cited by:

    1. Mourao, Paulo Reis, 2018. "What is China seeking from Africa? An analysis of the economic and political determinants of Chinese Outward Foreign Direct Investment based on Stochastic Frontier Models," China Economic Review, Elsevier, vol. 48(C), pages 258-268.
    2. Akintola Owolabi & Francis O. Iyoha, 2012. "Adopting International Financial Reporting Standards (IFRS) in Africa: benefits, prospects and challenges," African Journal of Accounting, Auditing and Finance, Inderscience Enterprises Ltd, vol. 1(1), pages 77-86.

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