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CORRUPTION, ACCOUNTING PRACTICE & ECONOMIC GROWTH: EVIDENCE FROM ASEAN COUNTRIES
Dendy Syaiful Akbar, Dede Abdul Rozak, Benny Prawiranegara, Eva Faridah

Universitas Galuh, Ciamis, Indonesia
dendysyaiful1984[at]gmail.com
Universitas Galuh, Ciamis, Indonesia
dedeabdulrozak44[at]gmail.com
Universitas Galuh, Ciamis, Indonesia
benny.feunigal[at]gmail.com
Universitas Galuh, Ciamis, Indonesia
vae_everal[at]gmail.com


Abstract

This study analyzes the impact of corruption on economic growth by including the role of accounting practices. Corruption has a negative influence on economic growth in countries with poor quality accounting practices than in countries with high-quality accounting practices. The new contribution of this study concerns the relationship between corruption literature and separate accounting practices regarding economic growth. To our knowledge, this is a study of the first ASEAN countries to document the impact of corruption on economic growth that depends on the quality of accounting practices in a country. We use cross-section data for 2018 for 11 ASEAN countries. Data on economic growth is taken from the World Bank, while corruption is represented by the Transparency International (TI) Corruption Perception Index (CPI). Meanwhile accounting practices are represented by the strength of auditing standards and financial reporting from the World Economic Forum (WEF), as well as the adoption of the International Public Sector Accounting Standards (IPSAS) in a country from the International Federation of Accountants (IFAC). We apply the Moderated Regression Analysis (MRA) approach for estimating results. The results of studies show that corruption inhibits economic growth. In addition, the strength of auditing standards and financial reporting strengthens the relationship between corruption and economic growth. Other results show that the adoption of IPSAS does not strengthen the relationship of corruption with economic growth in ASEAN countries. The findings of this study prove that high-quality accounting practices in a country can weaken corruption which can hamper economic growth. Conversely, corruption will easily grow in countries with weak quality accounting practices whose impact will hamper economic growth.

Keywords: corruption, accounting practice, economic growth

Topic: Cost Management and Accounting Management

Link: https://ifory.id/abstract/bYJ4AxkL9up2

Conference: The 3rd Asia Pacific Management Research Conference (APMRC 2019)

Plain Format | Corresponding Author (dendy syaiful akbar)

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