Does External Auditing Combat Corruption? Evidence from private firms

This paper aims to document whether firms with audited financial statements pay lower bribes to get contracts than firms without audited financial statements. In other words, this study assesses whether external auditing helps combat corruption. Design/methodology/approach: The World Bank Enterprise Survey data covering the period between 2006 and 2014 is used. The total sample comprised more than 50,000 firms in 126 countries. Findings: This paper finds that firms with audited financial statements pay significantly lower bribes compared to firms with unaudited financial statements. The results are robust across various estimation procedures, various proxies for bribery and various sub-samples. It is also found that the relationship between audited financial statements and bribery is more pronounced in environments where firms face higher pressure to engage in corrupt practices. Practical implications: The results imply that auditing of financial statements can act as a disciplining device to curb bribery in environments that encourage corruption. Originality/value: This paper is the first attempt, according to the authors’ knowledge, to examine the relationship between external auditing and corruption using firm-level data that cover 126 countries and is gathered over a 14-year period. Therefore, the results derived from this study are generalizable

Dividend Policy and Informativeness of Reported Earnings: Evidence from the MENA Region

This paper documents that informativeness of reported earnings, measured by earnings–return relation, is an increasing function of dividend payout ratio in the Middle East and North Africa region during the period between 2003 and 2014. We argue that higher dividends reduce agency conflicts. Lower agency problems lead firms to disclose information more truthfully, thereby improving credibility of reported earnings. We also show that our results hold for various proxies of dividend policy

Global economic burden of unmet surgical need for appendicitis

Background There is a substantial gap in provision of adequate surgical care in many low- and middle-income countries. This study aimed to identify the economic burden of unmet surgical need for the common condition of appendicitis. Methods Data on the incidence of appendicitis from 170 countries and two different approaches were used to estimate numbers of patients who do not receive surgery: as a fixed proportion of the total unmet surgical need per country (approach 1); and based on country income status (approach 2). Indirect costs with current levels of access and local quality, and those if quality were at the standards of high-income countries, were estimated. A human capital approach was applied, focusing on the economic burden resulting from premature death and absenteeism. Results Excess mortality was 4185 per 100 000 cases of appendicitis using approach 1 and 3448 per 100 000 using approach 2. The economic burden of continuing current levels of access and local quality was US $92 492 million using approach 1 and$73 141 million using approach 2. The economic burden of not providing surgical care to the standards of high-income countries was $95 004 million using approach 1 and$75 666 million using approach 2. The largest share of these costs resulted from premature death (97.7 per cent) and lack of access (97.0 per cent) in contrast to lack of quality. Conclusion For a comparatively non-complex emergency condition such as appendicitis, increasing access to care should be prioritized. Although improving quality of care should not be neglected, increasing provision of care at current standards could reduce societal costs substantially

Global economic burden of unmet surgical need for appendicitis

Background There is a substantial gap in provision of adequate surgical care in many low- and middle-income countries. This study aimed to identify the economic burden of unmet surgical need for the common condition of appendicitis. Methods Data on the incidence of appendicitis from 170 countries and two different approaches were used to estimate numbers of patients who do not receive surgery: as a fixed proportion of the total unmet surgical need per country (approach 1); and based on country income status (approach 2). Indirect costs with current levels of access and local quality, and those if quality were at the standards of high-income countries, were estimated. A human capital approach was applied, focusing on the economic burden resulting from premature death and absenteeism. Results Excess mortality was 4185 per 100 000 cases of appendicitis using approach 1 and 3448 per 100 000 using approach 2. The economic burden of continuing current levels of access and local quality was US $92 492 million using approach 1 and$73 141 million using approach 2. The economic burden of not providing surgical care to the standards of high-income countries was $95 004 million using approach 1 and$75 666 million using approach 2. The largest share of these costs resulted from premature death (97.7 per cent) and lack of access (97.0 per cent) in contrast to lack of quality. Conclusion For a comparatively non-complex emergency condition such as appendicitis, increasing access to care should be prioritized. Although improving quality of care should not be neglected, increasing provision of care at current standards could reduce societal costs substantially