A cross‐country perspective on professional oversight, education standards and countries' perceived level of corruption

Abstract

PurposeThe purpose of this paper is to investigate whether the existence of a professional oversight body and certain country‐specific education regulations in auditing are associated with a country's perceived level of corruption.Design/methodology/approachDrawing on data from the International Federation of Accountants (IFAC) database, the authors used the Mann‐Whitney U analysis technique to test the difference between countries' perceived level of corruption based on whether they have or have not developed professional oversight bodies and licensing regulations.FindingsResults suggest that countries that have established an audit profession oversight body are, indeed, perceived to be less corrupt. Similarly, countries that require practical experience, academic study, and a licensing examination in order to practice auditing are perceived to be less corrupt. On the other hand, the analysis shows that requiring auditors to fulfil continuing education requirements is not significantly related to a perception of lower levels of corruption.Practical implicationsThe paper provides important insights for policy makers, business leaders, education and the audit profession as a whole.Originality/valueThis paper provides some of the first empirical support for the relationship between corruption and the use of oversight bodies and licensing regulations in professional auditing at a country level.