The effects of national institutions on audit research: evidence from Europe and North America

Abstract

Auditing is claimed to have become more and more a global discipline. As a result of the expansion of the international audit firm networks, and the proliferation of International Standards on Auditing, differences between national auditing practices seem to have diminished. Surprisingly, national audit research communities seem to develop rather independently, suggesting that national institutions still play an important role in the production of audit research. Therefore, the objective of this paper is to assess the effects of local institutions on audit research. To that end, evidence is provided on the production of audit research in two areas: Europe and North America. Europe is an area with high variation in auditing institutions, while North America is an area with low variation in auditing institutions. A content analysis is presented of the European and North American auditing papers published in accounting and auditing research journals in the period 1990–7. The findings of the output assessment show that, compared to North American audit research, descriptions of national auditing institutions and environments are a dominant topic of European auditing papers, and that the output in terms of journal articles is lower. Subsequently, the paper attempts to explain why the assessed European and North American auditing research differs. The paper argues that the substantial differences in national institutional environments within Europe have two effects on European auditing research. On the one hand, national differences in auditing institutions and environments are an important subject of study. On the other hand, these differences result in a segmentation of the European audit research market, which is lacking in the North American market. The existence of a large number of smaller national auditing research markets results in different incentives, output and performance measures of auditing researchers. The paper concludes with an assessment of the future of audit research as a global discipline.