Law, Religiosity and Earnings Opacity Internationally

Abstract:     
This paper is an investigation of the relationship between earnings opacity in 24 countries and elements of law and religiosity. What the picture shows is a clear manifestation of earnings opacity internationally. What is puzzling with the picture is the finding that earnings opacity internationally is negatively related to both the degree of law enforcement and church attendance, witnessing to a clear impact of law and religiosity on earnings opacity. With regards to the impact of religiosity, while church attendance was negatively related to earnings opacity, belief in heaven was found to have an insignificant impact. Earnings opacity internationally appears to be dependent on the extent of belonging and not on the extent of believing. It is negatively related to the input of religiosity sector - church attendance and not to the output - belief in heaven. In summary, earnings opacity is negatively related to both the inputs of law and religiosity sectors - the degree of law enforcement and church attendance. It is the inputs of law and religiosity than the output that are at the core of the lack of accounting quality in general and earnings opacity in particular.

Number of Pages in PDF File: 20

Keywords: Law, religiosity, earnings opacity, belief in heaven

JEL Classification: M41, M43, M45, M47, M49

working papers series