Law, Religiosity and Earnings Opacity Internationally

20 Pages Posted: 18 Apr 2004  

Ahmed Riahi-Belkaoui

University of Illinois at Chicago - Department of Accounting

Date Written: April 14, 2004

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.

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

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

Suggested Citation

Riahi-Belkaoui, Ahmed, Law, Religiosity and Earnings Opacity Internationally (April 14, 2004). Available at SSRN: https://ssrn.com/abstract=530802 or http://dx.doi.org/10.2139/ssrn.530802

Ahmed Riahi-Belkaoui (Contact Author)

University of Illinois at Chicago - Department of Accounting ( email )

601 South Morgan Street
University Hall, Room 2303
Chicago, IL 60607
United States
312-996-4400 (Phone)
312-996-4520 (Fax)

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