Akintola Owolabi

Corruption and the environment of accounting and auditing in Africa

This paper empirically investigates the relationship between the level of corruption in 13 Anglophone African countries and their environment of accounting and auditing. Ten significant variables used by the World Bank in its Report on the Observance of Standards and Codes: accounting and auditing in African countries between 2001 and 2007 were developed into a composite accounting/auditing environment variable (ROSC), measured for each country and ranked. Corruption Perception Index (CPI) for the same period was obtained (Transparency International) for each country and ranked. The empirical result using Spearmans rank correlation indicates the existence of a positive relationship between accounting/auditing environment and corruption (correlation coefficient rs of 0.32), but the strength of the relationship is weak (at 0.05 level of significance). The quality of accounting and auditing as represented by their environment is a stimulus that could mitigate the impact of corruption. Institutions should be strengthened to achieve this.

Adopting International Financial Reporting Standards (IFRS) in Africa: benefits, prospects and challenges

This paper presents the findings of an empirical study on the benefits, prospects and challenges of adoption of International Financial Reporting Standards (IFRS) in some African countries. A questionnaire was administered to gather data from respondents made up of users and preparers of accounting information using the Twitter social network. The objective was to find out the perception of users and preparers about what the benefits, prospects and challenges of IFRS adoption are in African countries. The results of the study indicate that IFRS adoption in Africa will have the potential to be beneficial to a wide range of stakeholders. The benefits notwithstanding, there are however, a number of challenges to be faced in the process of adoption of the new standard including the ethical environment in Africa. The study recommends among others that a rigorous IFRS capacity building programme should be embarked upon by all regulatory bodies, firms and training institutions in order to provide the needed manpower for IFRS implementation, monitoring and compliance.

Audit committee reports and corporate governance in Nigeria

Audit committees are said to be important mechanisms of corporate governance. The aim of this research is to assess the quality of audit committee reports in annual reports and accounts by specifically measuring their conformance with the provisions of the Nigerian Companies and Allied Matters Act 1990. Of the 260 reports selected five years post Enron (2002-2006) for analysis, only 134 (52%) were available. The empirical results indicate that the reports (mostly unqualified) do not support public opinion and an earlier study on the credibility of financial report in Nigeria [see for example, Reports on the Observance of Standards and Codes (ROSC) (2004) by the World Bank and the International Monetary Fund (IMF)]. It is also at variance with the allegations of financial statement fraud committed by high profile companies in Nigeria (e.g., Unilever and Cadbury). An improvement in the quality of audit committee reports should enhance the credibility and transparency of financial report.

Real Options and Government Supports to Infrastructure Investments: An Empirical Study

This paper provides evidence for the relationship between various forms of real options in infrastructure projects and the types and levels of government supports to the infrastructure investments. It analyzes the common real options and real options-based strategic investments and aligns them with the common types of public-private partnership (PPP) infrastructure projects. It then develops models to show that the real options incorporated into the different types of PPP infrastructure projects affect the level of direct government cash supports to the projects and hence the viabilities of such projects. The paper however shows that the relationship between the embedded real options and viabilities of infrastructure projects can be influenced by such factors as contract period and percentage of private sector contributions to the projects.