Handbook of Accounting and Development
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Handbook of Accounting and Development

Edited by Trevor Hopper, Mathew Tsamenyi, Shahzad Uddin and Danture Wickramasinghe

The perspectives of the expert contributors reflect the strong growth of research on the topic, as accounting is increasingly recognised as an important factor in development. The book draws commentary and analyses together to inform future research, practice and policy and raises awareness of the actual and potential role of accounting in formulating and executing development policy.
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Chapter 7: Audit Markets in Less Developed Economies: Caveats for Globalization?

Javed Siddiqui


Javed Siddiqui 1. INTRODUCTION Although the serious effects of cultural, political, historical, religious and other contextual differences on accounting practices have been stressed extensively in the accounting literature, there have been consistent calls for harmonization of accounting and auditing practices throughout the globe. In the area of auditing, significant harmonization attempts have been initiated by the International Federation of Accountants (IFAC). The ongoing rapid economic and political globalization has led to the emergence of the IFAC as a global authority in auditing (Loft and Humphrey, 2006). The mission of IFAC, as stated in the organization’s much-publicized website, is ‘the worldwide development of an accountancy profession with harmonized standards, able to provide services of consistently high quality in the public interest’.1 In 2006, IFAC issued seven ‘statements of membership obligations’ (SMOs) to assist ‘high quality performance by professional accountants’ (IFAC, 2006). The member bodies of IFAC, which includes national accountancy bodies from most of the countries in the world, are required to make their best efforts to comply with the SMOs, and failure to do so without satisfactory explanations would result in suspension or removal of membership. IFAC’s globalization attempts are supported by donor agencies such as the World Bank and the International Monetary Fund (IMF), which, as part of their Review of Standards and Codes (ROSC) programme, assess whether national auditing standards and institutional environments are consistent with international standards on auditing (ISAs) and other IFAC SMOs such as the code of ethics. Prior literature has questioned the appropriateness of...

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