IFRS Adoption, Extent of Disclosure, and Perceived Corruption : A Cross-Country Study

Using data from 166 countries over the period 1996-2011, we investigate the role of accounting information in reducing corruption after controlling for the effects of political institutions and economic development. We find strong evidence that accounting environment plays only a minor role relative to the strength of political institutions in the control of corruption. Our results hold even after controlling for variables related to investor protection and cultural dimensions. Our results challenge the view that countries intending to reduce corruption should invest in higher-quality accounting standards. Our findings also suggest that countries with the strongest political institutions stand to benefit most from IFRS adoption