Threats to auditor independence: Evidence from Iran

This paper aims to examine threats to auditor independence in Iran. A mixed questionnaire, including both quantitative closed-ended questions and an open-ended qualitative question, is developed to investigate threats to auditor independence. Moreover, thematic analysis is used to triangulate the results against financial media articles throughout 1994 – 2014. Findings suggest that while bribery, non-audit services, and economic condition are key threats to auditor independence in Iran, gifts and presents do not compromise independence given the Iranian culture. This study contributes to a better understanding of auditor independence in Iran, which may apply to other regional settings. Moreover, it provides some suggestions to improve the current Iranian Audit Organisation’s auditor independence framework. (JEL M32)N/

Corporate governance compliance and disclosure in the banking sector: using data from Japan

Using regression model this study investigates which characteristics of a bank is associated with the extent of corporate governance disclosure in Japan. The findings suggest that on average 8 banks out of a sample of 46 disclose optimal corporate governance information. The regression model results reveal in general that non-executive directors, cross-ownership, capital adequacy ratio and type of auditors are associated with the extent of corporate governance disclosure. Of these four variables, non-executive directors have a more significant impact on the extent of disclosure contrary to total assets and audit firms of banks in the context of Japan. The findings of this paper are relevant for corporate regulators, professional associations and developers of corporate governance code when designing or updating corporate governance code

Accounting developments in Africa: a study of the impact of colonisation and the legal systems on accounting standards in sub-Saharan African countries

This article studies the impact of colonisation and the legal systems on the accounting standards in Sub-Saharan Africa (SSA). The countries are grouped according to their colonies and legal systems in order to identify as to under which jurisdictions the adoption of IAS is more common. Consequently, the study reveals that the majority of the countries which were under the British colonisation and legal system, either fully or partly, adopt the IAS contrary to the ex-French colonies. However, Kenya and Mauritania use the IAS although they are administered under the Islamic law

Corporate governance in the financial services sector of small island economies: a case study of Mauritius

This study investigates the practices of corporate governance in the financial services sector of small island economies with special reference to banks and insurance companies in Mauritius with a view to assess the level of compliance. The financial sector is today an important economic pillar on which the government is relying given the imminent recession in the sugar industry. In this respect financial institutions play a key role because they are the core set of the financial sector. It is therefore important for people to have confidence in both banks and insurance companies of their country. This is possible by ensuring compliance with good governance. In Mauritius, the Central Bank has issued its guidelines on good corporate governance for banks and this guide is made in line with the Corporate Governance Code issued by the National Committee on Corporate Governance. Banks are also required to comply with the codes as per the Banking Act 2004 and the Financial Reporting Act 2004. In a similar vein insurance companies should comply with the National Code on Corporate Governance and relevant laws related to good governance of insurance business, such as the Insurance Act 2005, the Financial Services Commission guidelines on Corporate Governance and the Financial Services Development Act 2002. In addition insurance companies should also comply with the Companies Act 2001 and the Financial Reporting Act 2004. This paper initially reports on the practice of corporate governance in the financial services sector of small island economies by drawing data from the Financial Sector Assessment Programme of the International Monetary Fund. A content analysis of the annual reports of companies in the sector is used to assess the level of compliance to corporate governance code in Mauritius and concludes that compliance rate is above 70% as regards board’s composition, audit committee, disclosure of policies and practices. This study reports that there are few cases of noncompliance with the National Code but good governance is necessary in the financial services sector to inspire stakeholders confidence.Full Tex

Lifting the veil of GDP and re-defining the concept of development in the context of accounting

The paper entitled 'Lifting the Veil of GNP and Redefining Developing Countries in the Context of Accounting' discusses that the level of GDP per head or other general economic indicators may not be the most relevant factors to define a developing economy. 29 countries are redefined in the accounting context and then ranked. This study reveals that a few countries, which are developing countries in the eyes of economists, are in fact classified as developed countries in the context of accounting and financial reporting. Further accounting indicators provide more relevant and specific indicators for the purpose of accounting

Determinants of accounting standards in the Southern African Development Community (SADC)

This paper reports on the factors influencing accounting standards in the South African Development Community (SADC). The factors have been identified on the basis of previous research (see Larson, Hofstede, Gray, Nobes, Parker, Muller, Doupnik, Doost, D'Arcy, to mention a few) and then analysed using the PESC analysis. A multinomial experiment using chi-square test is conducted to determine whether these factors are equally important to all member countries of the SADC. A chart of independence is used to determine whether the environmental factors and the countries are independent. For the purpose of both test, the member countries have been categorised into type A and type B. Type A include countries having their stock exchanges and type B those having no stock exchange. The reason behind this classification is to demonstrate whether there is a difference in the result of the experiment. The result of the experiment indicates that the countries and the environmental factors are independent

The importance and usefulness of financial reporting of municipalities: a case study of municipalities in Mauritius

There is already a body of literature on local government management and control, financial accounting and reporting in (Coombs et al., 1999). Most of these researchers have addressed the issue of the usefulness of financial reporting by municipalities in the context of large countries such as Malaysia or developed economies such as Australia, United States and United Kingdom (Coombs et al., 1999; Alijarde, 1997; Robbins, 1984). However, there is hardly any empirical evidence on the usefulness of financial reporting by municipalities from small island economies, such as Mauritius. Therefore, this paper fills that gap and attempts to analyse the issues using the information on municipalities in Mauritius. It focuses on the importance and usefulness of financial reports to the taxpayers including employees of the municipalities as users of the financial information. For this purpose, a survey was carried out on a sample of 300 taxpayers including employees and the general finding is that 99% of the taxpayers are interested to know how the municipalities use the tax collected from them. The findings of this study are consistent with the findings of Coombs et al. (1999) and Alijarde (1997). The study also reveals that the taxpayers are interested in other information such as a 'statement of tax collected and how utilised' by municipalities

Investigating the impact of four proxies of agency costs on dividend policy in the context of listed companies of small island economies: a case study of Mauritius

The study investigates the impacts of four agency costs on the dividend policy of firms listed on the Stock Exchange of Mauritius Ltd. (SEM). It uses least squares regression to test and examine the impact of four Agency Cost Variables (ACVs), namely ownership dispersion, insider ownership, Free Cash Flow (FCF) and leverage ratio, on the Dividend Payout Decisions (DPOD) in the Mauritian-listed companies. Dividend payout is used as the dependent variable and the four mechanisms to control agency costs as independent variables. This study reports that in the context of Mauritius, FCF is significantly related to the dividend payout ratio whilst leverage and ownership dispersion are very weakly related. However, this study also reveals that insider ownership is not related to dividend policy. Therefore, the results from this study support the conclusion reached by earlier empirical researches on FCF but do not affirm the same conclusions as regards leverage, ownership dispersion and insider ownership.agency cost; dividend policy; listed companies; small island economies; Mauritius; ownership dispersion; insider ownership; free cash; leverage ratio; dividend payout decisions.

The relevance and applicability of IAS in Madagascar: the perception of accounting practitioners

This article reports the result of a survey carried out on the importance and applicability of International Accounting Standards (lAS, now known as International Financial Reporting Standards, IFRS) Madagascar. This article uses IFRS to cover the use of international standards both before and after the reform of the 'International Accounting Standards Committee in 2001. The results of the survey show that IFRS are both totally applicable and also very important to Madagascar. An important challenge before the accounting bodies and professionals of Madagascar is addressing 20 issues not dealt with, in the present accounting plan and incorporating the same in the revised accounting plan

Measuring De Jure harmonisation: a content analysis of the accounting standards of three countries: South Africa, Mauritius and Tanzanian and International Financial Reporting Standards

This paper uses content analysis to compare International Financial Reporting Standards (IFRS)1 with the Local Accounting Standards (LAS) of South Africa (SA), Mauritius and Tanzania. It begins by identifying the equivalence of the local accounting standards of these three countries with IFRS and follows with a content analysis of the definition of terms, accounting treatment and disclosure requirements in the standards. The contents of these three items in each of these countries’ standards are compared with those in the IFRS. A score card is used to record the level of harmony between the LAS and IFRS of each country and between the LAS of each country. The score is compared by running statistical test of significant difference using Wilcoxon Matched Paired test. The paper reports that, except for Tanzania, the local accounting standards of the two other countries are more or less similar to IFRS. As regards the level of harmony between the local accounting standards and IFRS, the score card reveals that the accounting standards of SA are more in harmony with IFRS, followed by Mauritius. A lead table is produced at the end. Financial reporting, Globalisation, Standardisin