Do Accounting Regulation, Transparency and the Propensity to Bribe Affect the Perception of Corruption in Developed Countries?

This paper examines whether accounting regulation, transparency, and the propensity to bribe affect the perception of corruption in developed countries. While accounting regulation is indispensable for the smooth running of capital markets, it is crucial in reducing information asymmetry, and reporting uncertainty. Additionally, accounting regulation could be viewed as a tool that enhances transparency in financial reporting and reduces the perception of corruption. Although any form of bribery is considered illegal in most jurisdictions, it is very tempting for individuals and corporations to offer bribes to win contracts or obtain advantageous results unfairly. While the propensity to bribe is dependent on individual characteristics as well as unique circumstances, its deleterious effect increases the perception of corruption. Corruption does not discriminate between developed and developing countries. Indeed, corruption knows no borders and the detrimental effects that it exerts on its perpetrators in particular, and on the economy in general, are well documented. This study finds that accounting regulation and accounting transparency are statistically significant in the perception of corruption in developed countries