Do Auditing and Reporting Standards Affect Firms’ Ethical Behaviours? The Moderating Role of National Culture

This paper aims to examine the impact of national cultural values on the relation between auditing and reporting standards and ethical behaviours of firms. Based on a regression analysis using data regarding 54 countries between the years 2007 and 2012, we found that the impact of the perceived strength of auditing and reporting standards onthe perceived ethical behaviours of firms is accentuated when a society is characterized by low power distance and ingroup collectivism, and high institutional collectivism, futureorientation and uncertainty avoidance. Empirically, the study addresses a gap in the literature by highlighting the influence of national culture on the effectiveness of legalsettings and regulations on ethical behaviours