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Adoption of International Standards on Auditing (ISA): Do Institutional Factors Matter?

Boolaky, PK and Soobaroyen, T (2017) 'Adoption of International Standards on Auditing (ISA): Do Institutional Factors Matter?' International Journal of Auditing, 21 (1). 59 - 81. ISSN 1090-6738

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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.

Item Type: Article
Uncontrolled Keywords: International Standards on Auditing, neo-institutional theory, accounting
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Accounting Centre
Depositing User: Teerooven Soobaroyen
Date Deposited: 03 Nov 2016 16:23
Last Modified: 25 Dec 2018 02:00

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