Determining The Strength of Auditing Standards and Reporting

Abstract

This study devises a model to evaluate the strength of auditing standards and reporting (SARS) in individual countries. Drawing from data collected by the World Economic Forum the model's predictive capabilities are tested in the geographical region of sub-Saharan Africa. Data from 28 countries was utilised. The predictive powers of the model are significant. Eight of the thirteen variables utilised were found to be significant predictors of a country's SARS. Corporate governance variables and shareholder protection variables were found to be particularly prominent. Evaluation of the results also demonstrates that a country's SARS does not appear to be linked to adoption of international standards of auditing. This suggests standardised adoption of ISAs will not necessarily lead to uniformly strong and consistent audit reporting regimes across countries.