2nd International Scientific Conference on Recent Advances in Information Technology, Tourism, Economics, Management and Agriculture – ITEMA 2018 – Graz, Austria, November 8, 2018, CONFERENCE PROCEEDINGS published by the Association of Economists and Managers of the Balkans, Belgrade, Serbia; ISBN 978-86-80194-13-4
The aim of this paper is to investigate the extent to which good governance has an impact on strength of auditing and reporting standards. Previous studies have shown there are some certain determinant factors for the strength of auditing and reporting standards such as legal framework, corporate governance, financial market and education. The goal of this cross-country investigation is to continue developing the idea of previous studies, trying to identify if there is any influence of the quality of governance on auditing and financial reporting standards. Using an approach from two perspectives such as the geographical regions and income group classification, the findings show the influence of the governance clusters on the strength of auditing and reporting standards is not quite uniform. Thus, while voice and accountability, political stability and government effectiveness are most significant for countries from Europe, Central and North America, the others governance indicators such as regulatory quality, rule of law and control of corruption are also significant for countries from South America and Asia. Countries from Africa seems to be least affected by all these six governance clusters. Speaking from the perspective of income group classification, the results show the influence of governance quality is particularly highlighted for countries included in upper middle income and high income OECD.
 Boolaky P., & O’Leary, C. (2011) Determining the strength of auditing standards and reporting, Corporate Ownership & Control, 8(4), pp.291-304.
 Boolaky, P. (2012) Auditing and reporting in Europe: an analysis using country-level data. Managerial Auditing Journal 27 (1), pp.41-65.
 Lennox, C. (1999) Are large auditors more accurate than small auditors. Accounting and Business Research, 29(3), pp.217-227.
 Carson, E. (2009) Industry Specialization by Global Audit Firm Networks. The Accounting Review, 84(2), pp.355-382.
 Çule, M & Fulton, M. E. (2013) Corporate governance and subjective well-being. Applied Economics Letters, 20 (4), 364-367.
 Price R., Román, F.J. & Rountree B. (2011) The impact of governance reform on performance and transparency. Journal of Financial Economics, 99, 76-96.
 Almăşan, O., & Reinhardt, Z. (2009) The negative impact of legislation pitfalls on meaningful public participation, efficient policy-making and effective governance. Transylvanian Review of Administrative Sciences, 25E, pp.5-12.
 Mora, C.M. & Ţiclău, T. (2008) Managerial approach to public administration. Transylvanian Review of Administrative Sciences, 24E, pp.87-97.
 Răchişan, P.R., Boţa-Avram, C., Ivan, R., Groşanu A. (2015) Assessing the Impact of Corporate Governance and Economic Development on Environmental Performance: Empirical Evidence from Cross-country Survey, Journal of Environmental Protection and Ecology, 16 (3), pp.1194-1202.
 Răchişan P.R., Boţa-Avram, C. and Groşanu A. (2017) Investor protection and country-level governance: cross-country empirical panel data evidence, Economic Research-Ekonomska Istraživanja, 30 (1), pp.806-817.
 Boţa-Avram, C., Groşanu A., Răchişan P.R. and Gavriletea M.D. (2018) The Bidirectional causality between country-level governance, economic growth and sustainable development: a cross-country data analysis, Sustainability, 10 (2), pp.502-526.
 Arnold, P. (2012) The political economy of financial harmonization: The East Asian financial crisis and the rise of international accounting standards. Accounting, Organizations and Society, 37(6), pp.361-381.
 Allen, A., & Ramanna, K. (2012). Towards an understanding of the role of standard setters in standard setting. Journal of Accounting and Economics, 55(1), pp.66-90.
 Cortese C. & Irvine H. (2010). Investigating international accounting standards setting: The black box of IFRS 6. Research in Accounting Regulation, 22, pp.87-95.
 Hellmann, A., Perera H., & Patel C. (2010). Contextual issues of the convergence of International Financial Reporting Standards: The case of Germany. Advances in Accounting, 26(1), pp.108-116.
 Botzem, S., & Quack, S. (2009) (N)o limits to Anglo-American accounting? Reconstructing the history of the International Accounting Standards Committee: A review article. Accounting, Organizations and Society, 34(8), pp.988–998.
 Humphrey, C., Loft, A., & Woods, M.(2009) The global audit profession and the international financial architecture: Understanding regulatory relationships at a time of crisis. Accounting, Organizations and Society, 34(6-7), pp.810–825.
 Richardson, A.J. (2009). Regulatory networks for accounting and auditing standards: A social network analysis of Canadian and international standard-setting. Accounting, Organizations and Society, 34, pp.571-588.
 Srinidhi, B., Lim C.Y. & Hossain, M. (2009) Effects of country-level legal, extra-legal and political institutions on auditing: A cross-country analysis of the auditor specialization premium. Journal of Contemporary Accounting and Economics, 5(1), pp.34-46.
 Bhimani, A. (2008) The role of crisis in reshaping the role of accounting. Journal of Accounting and Public Policy, 27(6), pp.444–454.
 Zeff, A.S. (2007) Some obstacles to global financial reporting comparability and convergence at a high level of quality. The British Accounting Review, 39, pp.290-302.
 Nölke, A., & Perry, J. (2007) The power of transnational private governance: Financialization and the IASB, Business and Politics, 9(2), article 4.
 Perry, J. & Nölke, A. (2006) The political economy of international accounting standards, Review of International Political Economy, 13(4), pp.559–586.
 Eaton, S. B. (2005) Crisis and the consolidation of international accounting standards: Enron, IASB and America. Business and Politics, 7 (3).
 Mattli, W., & Büthe, T. (2005) Accountability in accounting? The politics of private rule-making in the public interest. Governance: An International Journal of Policy, Administration and Institutions, 18(3), pp.399–429.
 Armijo, L.E. (2001) The political geography of world financial reform: Who wants what and why? Global Governance, 7(4), pp.379–396.
 Nobes, C.H (2010) On Researching into the Use of IFRS by Private Entities in Europe. Accounting in Europe, 7(2), pp.213-226.
 Pineno, C.J. & Gelikanova, E.V., (2010) Obstacles to the implementation of international auditing standards, Proceedings of ASBBS, 2010, 17(1), pp.719-730.
 Boolaky, P.K. (2007) Measuring de jure harmonization: a content analysis of the accounting standards of three countries; South Africa, Mauritius and Tanzania and International Financial Reporting Standards. Journal of Applied Accounting Research, 8(2), pp.110-146.
 Barniv, R., Myring, M., & Thomas, W. (2005) The association between the legal and financial reporting environments and forecast performance of individual analysts. Contemporary Accounting Research, 22(4), pp.727-258.
 Hegarty, J., Gielen F., & Barros Hirata A.C. (2004) Implementation of international accounting and auditing standards – Lessons learned from the World Bank’s Accounting and Auditing ROSC Program, World Bank, Resource document: https://www.worldbank.org/ifa/LessonsLearned_ROSC_AA.pdf. Accessed 25 October 2017.
 Francis, J.R., Khurana, I.K., & Pereira, R. (2003) The role of accounting and auditing in corporate governance and the developments of financial markets around the world. Asia-Pacific Journal of Accounting and Economics, 10 (1), pp.1-30.
 Nobes, C.H. (1998) Towards a General Model of the Reasons for International Differences in Financial Reporting, Abacus, 36(2), pp.162-187.
 La Porta, R., Lopez-de-Silanes F.; Shleifer, A. & Vishny, R. (1997) Legal Determinants of External Finance. Journal of Finance, 52(3), pp.1131-1150.
 Salter, S.B. & Doupnik, T.S., (1992) The relationship between legal systems and accounting practices. Advances in International Accounting, 5, pp.3-22.
 World Bank (2016). 2016 Worldwide Governance Indicators (WGI) project 1996-2016. Resource document: https://info.worldbank.org/governance/wgi/index.asp. Accessed on 15 October 2017.
 Kaufmann, D., Kraay, A. & Zoido-Lobaton, P. (1999a). Aggregating Governance Indicators. World Bank Policy, Research Working Paper No.2195. The World Bank. Washington, DC.
 Kaufmann, D., Kraay, A. & Zoido-Lobaton, P. (1999b). Governance matters. World Bank Policy, Research Working Paper No.2196. The World Bank. Washington, DC.
 World Economic Forum (2016). Global Competitiveness Report 2015-2016, Resource document: https://www.weforum.org/. Accessed on 20 September 2017.
 Sala-i-Martín, X. & Artadi, E. V. (2004). The Global Competitiveness Index. The Global Competitiveness Report 2004–2005. Hampshire: Palgrave Macmillan.
 World Bank (2016). Country and Lending Groups, July. Resource document: https://data.worldbank.org/about/ country-classifications/ country-and-lending-groups#Low_income. Accessed on 29 October 2017