Please use this identifier to cite or link to this item: http://hdl.handle.net/1893/29818
Appears in Collections:Accounting and Finance Journal Articles
Peer Review Status: Refereed
Title: Accounting practice, fiscal decentralization and corruption
Author(s): Changwony, Frederick Kibon
Paterson, Audrey S
Contact Email: f.k.changwony@stir.ac.uk
Keywords: Accounting practice
Fiscal decentralization
Corruption
Public sector accounting
Financial reporting standards
IPSASs
Issue Date: Sep-2019
Citation: Changwony FK & Paterson AS (2019) Accounting practice, fiscal decentralization and corruption. British Accounting Review, 51 (5), Art. No.: 100834. https://doi.org/10.1016/j.bar.2019.04.003
Abstract: In prior studies, accounting and decentralization corruption solutions have so far been analysed in isolation. In this article, we connect these two strands of literature on corruption. Understanding this connection is important because weak financial accounting and reporting systems can inhibit monitoring incentives and thus reduce decentralization benefits in countering corruption. We argue that the effectiveness of decentralization as an anti-corruption barrier is complemented by the quality of the accounting practice in a country. Using multiple sources of data, we find that decentralization has a positive and increasing effect on reducing corruption among countries with a high-quality accounting practice. In contrast, decentralization has a negative and decreasing effect on reducing corruption among countries with weak-quality accounting practices. These findings are robust to alternative measures of accounting, decentralization and corruption and to endogeneity tests. Our findings demonstrate the crucial information role of accounting in enhancing decentralization monitoring mechanisms and in thereby reducing corruption.
DOI Link: 10.1016/j.bar.2019.04.003
Rights: This item has been embargoed for a period. During the embargo please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study. Accepted refereed manuscript of: Changwony FK & Paterson AS (2019) Accounting practice, fiscal decentralization and corruption. British Accounting Review, 51 (5), Art. No.: 100834. DOI: https://doi.org/10.1016/j.bar.2019.04.003 © 2019, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

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