The Impact of Religiosity on Earnings Quality: International Evidence from the Banking Sector

Omneya Abdel‐Salam, Antonios Chantziaras, Masud Ibrahim, Kamil Omoteso

Research output: Contribution to journalArticlepeer-review

22 Citations (Scopus)
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We examine the impact of religiosity on earnings quality, utilising a global sample of 1283 listed banks headquartered in 39 countries and covering the period 2002–2018. Using instrumental variables two-stage least squares regressions, we demonstrate that religiosity has a significant positive impact on banks’ earnings quality. We further show that the impact of religiosity becomes more pronounced among banks headquartered in countries where religion is an important element of national identity and in countries with weak legal protection. We show that the effects of religiosity are more intense during the global financial crisis period. Overall, these findings support the notion that high religiosity tends to reduce unethical activities by managers and can function as an alternative control mechanism for minimising agency costs. Our empirical investigation is robust to alternative model and sample specifications.

Original languageEnglish
Article number100957
JournalThe British Accounting Review
Issue number6
Early online date2 Oct 2020
Publication statusPublished - Nov 2021

Bibliographical note

NOTICE: this is the author’s version of a work that was accepted for publication in The British Accounting Review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality
control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in The British Accounting Review 53:6 (2021)
DOI: 10.1016/

© 2020, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International


Funding Information: This research received funding from the El Shaarani Research Centre for Ethical Finance, Accountability & Governance at Durham University, United Kingdom.


  • religiosity
  • earnings quality
  • informal institutions
  • institutional environment
  • social norms theory
  • Institutional environment
  • Social norms theory
  • Informal institutions
  • Religiosity
  • Earnings quality

ASJC Scopus subject areas

  • Accounting


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