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

Ibrahim Elmghaamez, Mohamed Elmagrhi

Research output: Contribution to journalArticlepeer-review

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., 3240 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, whereas 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.

Original languageEnglish
Pages (from-to)212-239
Number of pages28
JournalInternational Journal of Auditing
Volume26
Issue number2
Early online date17 Jan 2022
DOIs
Publication statusPublished - Apr 2022

Keywords

  • Auditing Standards
  • Regulation
  • Auditing History
  • Diffusion Theory
  • Political Factors
  • Educational Factors
  • Cultural Dimensions
  • Legal Factors

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