Journal of Business Ethics (2009) 87:173183
DOI 10.1007/s10551-008-9811-3
An Analysis of International Accounting
Codes of Conduct
ABSTRACT. The International Federation of Accountants
(IFAC) has recently issued a revised Code of Ethics for
Professional Accountants (IFAC Code). As a requirement
for membership in IFAC, a national accounting organiza-
tion must either adopt the IFAC Code or adopt a code of
conduct that is not less stringent than the IFAC Code. In
this paper, we examine the extent to which 158 national
accounting organizations have adopted the revised IFAC
Code as their own. Our results indicate that 80 of our
sample organizations have adopted the IFAC Code
(sometimes with minor modifications), while the remain-
ing 78 opted not to utilize the model IFAC Code. We then
test the hypothesis that national accounting organizations in
lower income economies would be less likely to adopt the
IFAC Code than those in high income economies. Our
results do not support the hypothesis. We argue that one
potential reason for such a finding is that adopting the IFAC
Code may be a cost effective means of adopting a code of
ethics for organizations in lower income economies.
Curtis Clements, Ph.D., CPA, is an assistant professor at
Abilene Christian University and has published articles in the
Journal of Accounting and Public Policy, Journal of
Information Systems, Internal Auditing, and Strategic
Finance.
John Neill, Ph.D., CPA, is a professor of accounting at Abilene
Christian University and has previously published articles in
numerous journals including the Journal of Business Ethics,
Corporate Governance: An International Review,
Journal of Accounting Literature, Accounting Hori-
zons, Journal of Applied Business Research, the Financial
Analysts Journal, and the Journal of Accounting, Ethics,
and Public Policy.
O. Scott Stovall, Ph.D., is an associate professor of accounting at
Abilene Christian University and has published articles in the
Journal of Business Ethics, Corporate Governance: An
International Review, Journal of Applied Business
Research, Management Accounting Quarterly, and
The Journal of Accounting Case Research.
Springer 2008
Curtis Clements
John D. Neill
O. Scott Stovall
KEY WORDS: accounting profession, codes of con-
duct, codes of ethics, IFAC
Introduction
Even though it is generally conceded that we are
moving toward a global economy, the accounting
profession has traditionally been slow in progressing
past national boundaries. For example, most coun-
tries have their own financial reporting standard
setting body (e.g., the Financial Accounting Stan-
dards Board in the United States) and unique
accounting professional organizations (e.g., the
American Institute of Certified Public Accountants).
However, within the past few years, there is some
movement toward internationalization in the
accounting profession. As an example, the Interna-
tional Accounting Standards Board is attempting to
harmonize financial reporting standards throughout
the world. Similarly, and more relevant to this study,
the International Federation of Accountants (IFAC)
has recently issued a revised Code of Ethics for
Professional Accountants (IFAC Code). According
to Farrell and Cobbin (2000, p. 182), the IFAC Code
is intended as a model code directed at national
associations of accountants. In other words, the
IFAC Code can potentially serve as the basis for
various national accountancy codes of conduct.
Given the rate at which we are approaching a
global economy, one might predict that there would
be significant similarities across international
accounting codes of conduct. However, there may
be cultural, institutional, philosophical, and nation-
alistic influences on the purposes, approaches, and
content contained in codes of ethics in the
accounting discipline across the world. Our goals in
174 Curtis Clements et al.
this study are to assess the extent to which various
national accounting organizations codes of conduct
align with the recently revised IFAC Code and to
test whether national accounting organizations
choice as to whether to adopt the IFAC Code is
influenced by socioeconomic factors.
Prior research
Our literature review has uncovered only two prior
studies that analyze a number of international
accounting codes of conduct. In the earlier of the two
studies, Farrell and Cobbin (2000) conducted a con-
tent analysis of 57 national accounting associations
codes of ethics. They found that 96% of the codes of
conduct that they analyzed were decretal (i.e., rule-
based) in nature. Even though the vast majority of the
57 codes were rule-based codes, many of them also
included an allodial (i.e., inspirational) component
that listed important values and/or principles that
professional accountants should adhere to. Farrell and
Cobbin (2000, p. 188) conclude that:
The Ethics Committee of IFAC has chosen to provide
a model code of ethics in the quest for harmonisation
of measurable behavioural standards for professional
accountants throughout the world. The findings pre-
sented in this paper indicate that the position taken by
IFAC in selecting a decretal code (with inspirational
content) is congruent with the codes analysed in this
research.
More recently, Jakubowski et al. (2002, p. 111)
examined the extent to which similarities and dif-
ferences exist in the codes of professional conduct of
certified (chartered) accountants across the following
countries: the United States, Taiwan, South Korea,
Malaysia, Ontario (Canada), Australia, India, and
Hong Kong. They found both similarities and
differences in ethical rules across the eight countries
analyzed. Specifically, Jakubowski et al. (2002,
p. 111) determined that some ethical rules were
culture free and did not vary across the eight
countries, while cross-country variations were
present with regard to the elaborateness and/or
specificity of certain ethical rules. They attributed
the cross-country variations to various factors,
including economic, cultural, and legal differences
across the countries.
On a more conceptual level, Cohen et al. (1992,
p. 687) provide a framework for the examination of
cultural and socioeconomic factors that could impede
the acceptance and implementation of a professions
international code of conduct. Specifically, they
apply their analysis to the decision as to whether or
not to adopt the version of the IFAC Code that was
in place at the time of their analysis. While we
concede that the decision as to whether to adopt the
IFAC Code may be influenced by both cultural and
socioeconomic factors, in the current paper we focus
on socioeconomic influences and leave the cultural
influences for future research efforts.
Cohen et al.s (1992) analysis suggests that a
countrys level of socioeconomic development is
related to the decision about whether to adopt the
model IFAC Code or not. They argue that national
accounting organizations in less developed economies
will be resistant to adopting the IFAC Code since the
code was largely authored by, and is primarily useful
for accountants in developed economies. Cohen et al.
(1992, p. 690) develop their argument as follows:
Wallace (1990) identifies the lack of appropriateness of
international standards for developing countries as the
primary problem confronting harmonization of
accounting standards. A code of ethics which addresses
the ethical conflict arising in the context of the high
technical proficiency required of accountants in a
developed economy might also be inappropriate, or at
the very least irrelevant, for accountants in developing
countries.
In the current paper, we extend prior research in
three ways. First, our research is unique since, in the
first stage of the analysis, we do not conduct a cross-
country analysis, but rather compare each of our
international accounting codes of conduct with the
model IFAC Code. That is, our goal is to assess the
extent to which the IFACs efforts to harmonize
ethics standards have been successful. Second, this
paper represents an update of prior research findings
since we examine various national accounting
organizations decision about whether to adopt the
IFAC Code in a time period subsequent to the
recent major revision of the IFAC Code. Third, we
conduct an empirical assessment of the hypothesis
suggested by Cohen et al.s (1992) analysis that the
decision to adopt the IFAC Code is related to a
countrys level of socio-economic development.
 An Analysis of International Accounting Codes of Conduct
The IFAC Code of ethics
The International Federation of Accountants cur-
rently has 134 members and 24 associate1 member
organizations. Members of the IFAC are national
accounting organizations rather than individual
professional accountants or accounting firms. For
example, there are currently three IFAC member
organizations in the United States. They are the
American Institute of Certified Public Accountants
(AICPA), the Institute of Management Accountants
(IMA), and the National Association of State Boards
of Accountancy.
According to the IFAC Code, the mission of the
International Federation of Accountants is the
worldwide development and enhancement of an
accountancy profession with harmonized standards,
able to provide services of consistently high quality
in the public interest (IFAC, 2005, p. 2). Interna-
tional harmonization of accounting standards,
including ethical standards, is therefore a major goal
of the IFAC. Pursuant to that goal, the IFAC issued
a revised Code of Ethics for Professional Accoun-
tants in June 2005. As previously mentioned, Far-
rell and Cobbin (2000) describe the IFAC Code as a
model code of ethics directed at national accounting
associations.
Adoption of the IFAC Code is not a prerequisite
for membership in the IFAC. However, according
to the IFAC Code, A member body of IFAC or
firm may not apply less stringent standards than
those stated in this Code (IFAC, 2005, p. 2).
IFAC member organizations may therefore adopt
their own code of conduct for their members.
However, any code adopted by IFAC member
organizations must not be less stringent than the
IFAC Code.
Based on the preceding discussion about the
possibility that IFAC member organizations may
choose to adopt a code that is not less stringent
than the IFAC Code and Cohen et al.s (1992)
analysis of socioeconomic influences on the adop-
tion decision, we have formulated two research
questions. Our primary research question is: To
what extent are IFAC member accounting organi-
zations adopting the IFAC Code of Ethics as their
own? In other words, are IFAC members adopting
the model IFAC Code or are they utilizing a unique
code of ethics that is not less stringent than the
175
IFAC Code? Our secondary question is What is the
effect of socioeconomic level on the decision as to
whether to adopt the IFAC model code?
Data collection and empirical results
Data
We were able to collect the necessary data directly
from the IFAC website (IFAC, 2007) about whe-
ther IFAC member and associate organizations have
adopted the IFAC Code. Each IFAC member
organization must complete a survey as a require-
ment of membership and the results of those sur-
veys are available online to the public. The survey
consists of two parts. In Part 1, IFAC members and
associates must provide information regarding their
countrys standard-setting and regulatory frame-
work, while in Part 2 they describe their organi-
zations attempts to address IFACs membership
requirements. A portion of the Part 2 survey
questions specifically addresses whether the member
organization has adopted the model IFAC Code of
Ethics. We were able to collect data on whether all
158 member and associate members adopted the
IFAC Code or not.
It is important to note at the outset that our data
represents self-reported data by each of the 158
IFAC member organizations. We would also point
out that we classified each national accounting
organization as either an adopter or non-adopter of
the IFAC Code based on the survey responses that
are currently available on the IFAC website. Most of
the survey responses represent recent data since they
were posted on the IFAC website within the last
year, but a few of the responses have been on the
website since June 2006. Therefore, it is possible that
one or more of the organizations that had not
adopted the IFAC Code at the time they completed
the IFAC membership survey have subsequently
adopted the IFAC Code as their own.2
We also collected data on the socioeconomic
status of each IFAC members country from the
World Bank (2007). The World Bank classifies
economies into income groups based on gross
national income per capita. The various income
groups are labeled low income, lower middle
income, upper middle income, and high income.
176 Curtis Clements et al.
According to the World Bank (2007, p. 1), Low
income and middle income economies are some-
times referred to as developing economies. How-
ever, in our analysis we have chosen not to combine
the low income and two middle income groups into
one developing economies group. Rather, we
have chosen to examine each of the four World
Bank income groups separately.3 We were able to
collect socioeconomic data for 153 of the 158 IFAC
members and associates. Therefore, our empirical
tests of the relationship between the socioeconomic
status and IFAC Code adoption decision are based
on the 153 organizations for which we have com-
plete data.
Empirical results IFAC members which adopted
the IFAC Code
Of the 158 IFAC member and associate member
organizations, 42 have adopted the IFAC Code as
their organizational code of ethics without any
modifications. Table I lists these 42 national
accounting organizations. A cursory examination of
Table I reveals that the vast majority of accounting
organizations that have adopted the IFAC Code
without modification are from economies that are
generally considered to be in the lower per capita
income groups. Even though we will conduct a
formal statistical analysis later in this paper, at first
glance it appears that the hypothesis that lower
income countries would be less likely to adopt the
model code of ethics cannot be supported.
Table II provides a listing of another 38 national
accounting organizations that have adopted the
IFAC Code, albeit with modifications. For ex-
ample, the Philippine Institute of Certified Public
Accountants stated in their survey responses that
they adopted the IFAC Code in its entirety with the
exception of very small modifications in the
requirements concerning advertising by professional
accountants. For the purposes of our analysis, we
classify the 38 national accounting organizations
listed in Table II as adopters of the IFAC Code of
Ethics. Therefore, Tables I and II reveal that 80 out
of the 158 (50.6%) IFAC members and associates
have adopted (sometimes with minor modifications)
the IFAC Code as their own code of ethical
conduct.
Empirical results IFAC members not adopting
the IFAC Code
We have classified the 78 IFAC members and
associates that did not adopt the IFAC Code into
three categories, based on their responses to the
IFAC survey. In Table III, we provide a listing of
the 34 IFAC members that responded that they have
developed their own ethical requirements along
with a process to eliminate differences between their
ethical requirements and those of the IFAC Code. In
other words, these 34 national accounting organi-
zations have chosen not to adopt the IFAC Code as
their own code of ethics at the present time, but they
are on record as stating that they either plan to
harmonize (i.e., converge) their ethical standards
with those of the IFAC Code to the extent possible
or replace their own code with the IFAC Code at
some later date.
The Japanese Institute of Certified Public
Accountants is an example of an accounting orga-
nization that is striving toward convergence of their
code of conduct with the IFAC Code. They stated
in their survey response that, We have established
an Ethics Committee charged with developing our
Code of Ethics. When amending the existing Code
or developing new requirements, the Committee
reviews the IFAC Code and incorporates the IFAC
Code requirements where necessary (IFAC, 2007).
As another example, the AICPA stated in their
survey response that, We have a convergence plan
in place and are in the process of implementation
(IFAC, 2007).
It is interesting to note that accounting organi-
zations from many of the largest economies
(including the American Institute of Certified Public
Accountants) are in this category. Again, at first
glance, this result appears inconsistent with the
hypothesis that accounting organizations in lower
income economies would be less likely to adopt the
IFAC Code as their own.
Table IV lists the 17 national accounting organi-
zations that responded to the IFAC membership
survey that they have developed their own ethical
requirements and that they use another approach to
incorporate the IFAC Code. As an example, the
national accounting organization in Portugal stated
in their survey response that The IFAC Code of
Ethics was considered and incorporated to some
 An Analysis of International Accounting Codes of Conduct 177

TABLE I
Organizations adopting the IFAC Code as issued without modifications (Count = 42)

Armenia Association of Accountants and Auditors of Armenia

Azerbaijan Republic The Chamber of Auditors of Azerbaijan Republic
Bahamas The Bahamas Institute of Chartered Accountants
Barbados The Institute of Chartered Accountants of Barbados
Bolivia Colegio de Auditores de Bolivia
Bosnia and Herzegovin Association of Accountants and Auditors of Republic Srpska
Botswana Botswana Institute of Accountants
Bulgaria Institute of Certified Public Accountants in Bulgaria
Colombia Instituto Nacional de Contadores Publicos de Colombia
Cyprus The Institute of Certified Public Accountants of Cyprus
Czech Republic Union of Accountants of the Czech Republic
Denmark Foreningen Registrerede Revisorer FRR
Egypt The Egyptian Society of Accountants & Auditors
Georgia Georgian Federation of Professional Accountants and Auditors
Ghana The Institute of Chartered Accountants (Ghana)
Iran Iranian Association of Certified Public Accountants
Ireland The Institute of Certified Public Accountants in Ireland
Ivory Coast Ordre des Experts Comptables et Comptables Agrees de Cote dIvoire
Jamaica The Institute of Chartered Accountants of Jamaica
Jordan Jordanian Association of Certified Public Accountants
Kazakhstan Chamber of Auditors of the Republic of Kazakhstan
Kenya Institute of Certified Public Accountants of Kenya
Kosovo (Unmik) Society of Certified Accountants and Auditors of Kosovo
Latvia Latvian Association of Certified Auditors
Lebanon Lebanese Association of Certified Public Accountants (LACPA)
Moldova (Republic of) Association of Professional Accountants & Auditors of the Republic of Moldova
Montenegro The Institute of Accountants and Auditors of Montenegro
Pakistan Institute of Cost and Management Accountants of Pakistan
Papua New Guinea Certified Practising Accountants Papua New Guinea
Paraguay Colegio de Contadores de Paraguay
Romania The Chamber of Financial Auditors of Romania
Serbia Serbian Association of Accountants and Auditors
Slovakia Slovenska Komora Auditorov
Slovenia The Slovenian Institute of Auditors
South Africa The South African Institute of Chartered Accountants
Sweden FAR SRS
Trinidad and Tobago The Institute of Chartered Accountants of Trinidad & Tobago
Turkey Expert Accountants Association of Turkey
Ukraine Ukrainian Federation of Professional Accountants and Auditors
United Kingdom The Chartered Institute of Public Finance and Accountancy
United Kingdom The Chartered Institute of Management Accountants (CIMA)
Zimbabwe The Institute of Chartered Accountants of Zimbabwe

extent in our own Code of ethics. Our code is
generally a principle based code containing the
major issues of the IFAC Code that is more rules
based than ours (IFAC, 2007). Similarly, the Saudi
Organization for Certified Public Accountants stated
that SOCPA prepared its code of ethics based on
those ethics adopted in many countries including the
code of ethics issued by IFAC (IFAC, 2007).
Therefore, in both these examples, the accounting
organization chose to adopt its own code of ethics
178 Curtis Clements et al.

TABLE II
Organizations adopting the IFAC Code with modifications (Count = 38)

Albania Albanian Institute of Authorized Chartered Auditors

Australia National Institute of Accountants in Australia
Australia CPA Australia
Cameroon The Institute of Chartered Accountants of Cameroon (ONECCA)
Costa Rica Colegio de Contadores Publicos de Costa Rica
Czech Republic Chamber of Auditors of the Czech Republic
Denmark Foreningen af Statsautoriserede Revisorer
Finland KHT-yhdistys-Foreningen CGR ry
Hong Kong Hong Kong Institute of Certified Public Accountants
Israel Institute of Certified Public Accountants in Israel
Italy Consiglio Nazionale dei Ragionieri e Periti Commerciali
Korea Korean Institute of Certified Public Accountants
Kuwait Kuwait Association of Accountants and Auditors
Kyrgyzstan Union of Accountants and Auditors
Luxembourg Institut des Reviseurs dEntreprises
Madagascar Ordre des Experts Comptables et Financiers de Madagascar
Malawi The Society of Accountants in Malawi
Malaysia Malaysian Institute of Certified Public Accountants
Malaysia Malaysian Institute of Accountants
Malta The Malta Institute of Accountants
Mongolia Mongolian Institute of Certified Public Accountants (MonICPA)
Nepal The Institute of Chatered Accountants of Nepal
Netherlands Koninklijk Nederlands Instituut van Registeraccountants (Royal NIVRA)
Nigeria The Institute of Chartered Accountants of Nigeria
Pakistan The Institute of Chartered Accountants of Pakistan
Pakistan Pakistan Institute of Public Finance Accountants (PIPFA)
Philippines Philippine Institute of Certified Public Accountants
Romania Corpul Expertilor Contabili si Contabililor Autorizati din Romania
Russia Russian Collegium of Auditors
Singapore Institute of Certified Public Accountants of Singapore
Sri Lanka The Institute of Chartered Accountants of Sri Lanka
Swaziland Swaziland Institute of Accountants
Tanzania National Board of Accountants and Auditors (NBAA) Tanzania
Tunisia Ordre des Experts Comptables de Tunisie
Uganda Institute of Certified Public Accountants of Uganda
Uzbekistan National Association of Professional Accountants and Auditors of Uzbekistan
Vietnam Vietnam Accounting Association
Zambia Zambia Institute of Chartered Public Accountants

and incorporated many of the provisions of the
IFAC Code into their unique code of ethics.
A third example is also illustrative of the
accounting organizations listed in Table IV. The
accounting organization in Uruguay stated in their
survey response that The existing code differs from
the existing IFAC Code of Ethics. At present, our
organization is discussing how to minimize differ-
ences with IFAC Code of Ethics (IFAC, 2007).
Again, this accounting organization chose not to
adopt the IFAC Code as their own, but they are
intent on reducing the differences between their
own code and the IFAC Code.
Finally, in Table V we list another 27 accounting
organizations that have neither adopted the IFAC
Code nor plan to converge their ethical require-
ments with those of the IFAC Code. In other words,
the 27 organizations listed in Table V have not
 An Analysis of International Accounting Codes of Conduct 179

TABLE III
Organizations that developed their own ethical requirements with a process to eliminate differences between their
ethical requirements and the IFAC Code (Count = 34)

Argentina Federacion Argentina de Consejos Profesionales de Ciencias Economicas

Australia The Institute of Chartered Accountants in Australia
Bahrain Bahrain Accountants Association (BAA)
Bangladesh The Institute of Chartered Accountants of Bangladesh
Belgium Institut des Experts Comptables-Comptables et des Conseils Fiscaux
Canada The Canadian Institute of Chartered Accountants
Canada CMA Canada
Canada Certified General Accountants Association of Canada
Chile Colegio de Contadores de Chile
China The Chinese Institute of Certified Public Accountants (CICPA)
Chinese Taiwan Federation of CPA Associations of Chinese Taiwan
Fiji Fiji Institute of Accountants
Germany Wirtschaftspruferkammer (WPK)
Greece Institute of Certified Public Accountants of Greece (SOEL)
Haiti Ordre des Comptables Professionels Agrees dHaiti
India The Institute of Cost and Works Accountants of India
Ireland The Institute of Chartered Accountants in Ireland
Ireland The Institute of Accounting Technicians in Ireland
Japan The Japanese Institute of Certified Public Accountants
Lesotho Lesotho Institute of Accountants
Mexico Instituto Mexicano de Contadores Publicos, A.C.
Namibia Institute of Chartered Accountants of Namibia
Nicaragua Colegio de Contadores Publicos de Nicaragua
Norway Den Norske Revisorforening (DnR)
Panama Colegio de Contadores Publicos Autorizados de Panama
Poland Accountants Association in Poland
Russia The Institute of Professional Accountants of Russia
Senegal Ordre National des Experts Comptables et Comptables
South Africa The South African Institute of Professional Accountants
Sri Lanka Association of Accounting Technicians of Sri Lanka
Turkey Union of Chambers of Certified Public Accountants of Turkey
United Kingdom The Institute of Chartered Accountants in England & Wales
United Kingdom Association of Accounting Technicians (AAT)
United States American Institute of Certified Public Accountants

adopted the IFAC Code and have no plans to do so
in the future. There are varied reasons for such a
decision. For example, many of the organizations in
this category state in their survey responses that
ethical standards for professional accountants are
mandated by law in their country, and therefore
there is no reason to adopt an ethical code beyond
that prescribed by law. The accounting organizations
in Finland, Germany, Belgium, Austria, and France
that are listed in Table V each expressed this regu-
latory reason for not adopting the IFAC Code.
Another interesting reason for not adopting the
IFAC Code was provided by the Institute of Man-
agement Accountants in the United States. The IMA
stated in their survey response that IMA established
its Code of Ethics many years prior to the IFAC Code
of Ethics. While the IMA Code is believed to be in
compliance with the IFAC Code, this has not been
established as a specific goal (IFAC, 2007). In other
words, the IMA is satisfied with their current code of
conduct and has no desire to adopt the IFAC Code.
One potential reason for such a response is that the
180 Curtis Clements et al.

TABLE IV
Organizations that developed their own ethical requirements and use another approach to incorporate the IFAC Code
of Ethics (Count = 17)

Dominican Republic Instituto de Contadores Publicos Autorizados de la Republica Dominicana

Estonia Estonian Auditing Board
Guatemala Instituto Guatemalteco de Contadores Publicos y Auditores
Honduras Colegio de Peritos Mercantiles y Contadores Publicos
Hungary Chamber of Hungarian Auditors
India The Institute of Chartered Accountants of India
Indonesia Indonesian Institute of Accountants or Ikatan Akuntan Indonesia (IAI)
Italy Consiglio Nazionale dei Dottori Commercialisti
Lithuania Lithuanian Chamber of Auditors
Poland National Chamber of Statutory Auditors
Portugal Ordem dos Revisores Oficiais de Contas (OROC)
Saudi Arabia Saudi Organization for Certified Public Accountants
Switzerland Treuhand-Kammer -Swiss Inst. of Certified Accountants and Tax Consultants
Thailand Federation of Accounting Professions
United Kingdom The Association of Chartered Certified Accountants
United Kingdom The Institute of Chartered Accountants of Scotland
Uruguay Colegio de Contadores, Economistas y Administradores del Uruguay

IFAC Code is oriented toward professional accoun-
tants in public practice, while the vast majority of
IMA members are involved in corporate or govern-
mental accounting. It seems likely that professional
organizations representing public accountants per-
forming attestation work such as auditing financial
statements would be concerned with ethical issues
relevant to that work (such as independence), while
managerial accountants would have different ethical
concerns.
Regardless of the reasons given, each of the 78
national accounting organizations listed in Tables
IIIV chose not to adopt the IFAC Code as their
own code of conduct at the time they answered the
IFAC survey. As stated earlier, adoption of the IFAC
Code is not mandatory for IFAC membership. What
is required for IFAC membership is that any code of
ethics adopted by an IFAC member organization
must not be less stringent than the IFAC Code. As
noted in the quote in the previous paragraph, the
IMA believes that their code complies with the
IFAC Code. Whether the IMA Code, or the codes
for the other 77 non-adopting organizations for that
matter, is at least as stringent as the IFAC Code is
based on the subjective judgment of each of these
national accounting organizations. We will revisit
this issue when we provide some suggestions for
future research.
Empirical results is adoption decision influenced
by socioeconomic factors?
We categorized each of our national accounting
organizations as either an adopter or a non-adopter
of the model IFAC Code based on their responses to
the IFAC membership survey. We also classified
each organization based on its countrys level of
economic development. As stated earlier, we classi-
fied each organization into one of four income
categories, based on economic data obtained from
the World Bank website. The four income catego-
ries are low income, lower middle income, upper
middle income, and high income. We were only
able to collect economic data on 153 of our 158
accounting organizations. Therefore, the empirical
tests described in this section were based on the 153
organizations for which we had complete data on
both adoption decision and socioeconomic status.
Table VI provides the results of a v2 test that
examines whether the decision to adopt the IFAC
Code is influenced by socioeconomic factors. We
are specifically testing the hypothesis that accounting
organizations in lower income economies would be
less likely to adopt the IFAC Code than those in
high income economies. The results indicate that
there is no significant relationship between the IFAC
Code adoption decision and socioeconomic status.
 An Analysis of International Accounting Codes of Conduct 181

TABLE V
Organizations with neither adoption nor convergence with the IFAC Code of Ethics (Count = 27)

Austria Kammer der Wirtschaftstreuhander

Austria Institut Osterreichischer Wirtschaftsprufer
Bangladesh The Institute of Cost and Management Accountants of Bangladesh
Belgium Institut des Reviseurs dEntreprises
Brazil Instituto dos Auditores Independentes do Brasil IBRACON
Brazil Conselho Federal de Contabilidade (CFC)
Croatia Croatian Association of Accountants and Financial Experts
Finland HTM-tilintarkastajat GRM revisorer ry
France Conseil Superieur de lOrdre des Experts-Comptables
France Compagnie Nationale des Commissaires aux Comptes
Germany Institut der Wirtschaftsprufer in Deutschland e.V.
Grand Cayman Cayman Islands Society of Professional Accountants
Guyana The Institute of Chartered Accountants of Guyana
Iceland Felag Loggiltra Endurskodenda, FLE
Iran The Iranian Institute of Certified Accountants
Iraq Iraqi Union of Accountants and Auditors
Jordan Arab Society of Certified Accountants
Liberia The Liberian Institute of Certified Public Accountants
Mauritius Mauritius Institue of Professional Accountants
Morocco Ordre des Experts Comptables du Royaume du Maroc (Morocco)
New Zealand New Zealand Institute of Chartered Accountants
Peru Junta de Decanos de Colegios de Contadores Publicos del Peru
Sierra Leone The Institute of Chartered Accountants of Sierra Leone, (ICASL)
Spain Instituto de Censores Jurados de Cuentas de Espana (I.C.J.C.E.)
United States Institute of Management Accountants
United States National Association of State Boards of Accountancy
Venezuela Federacion de Colegios de Contadores Publicos de Venezuela

TABLE VI
Even if one were to view a p-value of 0.0997 as
significant, the observed relationship is in the
v2 Test of the relationship between IFAC Code adop-
opposite direction than that hypothesized. Table VI
tion decision and socioeconomic status
indicates that only 24 of the 58 (41.4%) accounting
organizations in high income economies have
Income levela Adoptb Non-adoptb Total
adopted the IFAC Code as their own code of con-
Low income 19 8 27 duct. The table also shows an approximately equal
Lower middle income 18 17 35 percentage of adopters and non-adopters in both of
Upper middle income 16 17 33 the middle income groups. Both of these results are
High income 24 34 58 inconsistent with the hypothesis that accounting
Total 77 76 153 organizations in lower income economies would be
a less likely to adopt the IFAC Code.
Income levels are determined by the World Bank and are
based on per capita income.
b
Organizations are classified as adopters if they adopted
Implications of research findings
the IFAC Code of Ethics with or without modification.
Organizations are classified as non-adopters if they did not and suggestions for future research
adopt the IFAC Code of Ethics.
v2 = 6.258. Our results indicate that the IFAC has been mod-
df = 3. erately successful in their attempt to harmonize
p = 0.0997. ethics standards for professional accountants across
182 Curtis Clements et al.
the world. Our findings demonstrate that slightly
over 50% of IFAC members and associates have
adopted the IFAC Code (sometimes with minor
modifications) as their own code of conduct. In
addition, we found that numerous non-adopting
accounting organizations are striving to minimize
the differences between their code of ethics and the
IFAC Code and still others are planning on adopting
the IFAC Code at some later date. It therefore
appears to us that the IFACs harmonization efforts
are working and we expect that an even greater
percentage of IFAC members will be adopters of the
IFAC Code in the future than are now.
We are unable to provide empirical support for
the hypothesis that accounting organizations in
lower income economies would be less likely to
adopt the IFAC Code. We believe that a potential
reason for our lack of support for the hypothesized
relationship is that accounting organizations in lower
income economies may not have the resources
needed to develop an effective code of conduct on
their own. These organizations would therefore find
it cost beneficial to simply adopt the model IFAC
Code.
We should also note that there is potentially a
difference between an accounting organization
adopting a code of ethics and that organization being
able to enforce such a code upon its membership. In
other words, it may be relatively easy (i.e., low cost)
for an organization in a lower income economy to
adopt the IFAC Code, while the conditions within
that country, including cultural and socioeconomic
factors, might make it very difficult for the organi-
zation to enforce the ethical code. It may very well
be that an underfunded organization in a lower in-
come country would find it very challenging to
assess the extent to which members are compliant
with an adopted code of ethics, let alone bring any
meaningful enforcement action against members for
alleged noncompliance. Therefore, Cohen et al.s
(1992) suggestion that economic endowment affects
international accounting codes of ethics might well
hold true if one examines adherence and enforcement
rather than mere adoption.
There are several avenues for future research
activity in this area. As stated earlier, in this paper we
have focused on the socioeconomic influences por-
tion of Cohen et al.s (1992) analysis. Future re-
search could test whether various cultural factors,
including those described by Cohen et al. (1992),
influence the IFAC Code adoption decision. As
examples, do the extent to which a country (1)
enjoys an established rule of law including property
rights, (2) is a consumer verses regulatory oriented
society, or (3) exhibits individualistic verses com-
munal tendencies among its populous affect the
likelihood that their professional accounting orga-
nizations would adopt a universal (international)
code of ethics? Also, as stated earlier, each non-
adopter of the IFAC Code is required to have a code
of conduct that is not less stringent than the model
code. We believe an interesting empirical question is
whether in fact the codes adopted by non-adopters
of the IFAC Code are at least as restrictive as the
IFAC Code.
As globalization continues to occur in culture,
technology, and business, the accounting profession
must continue to keep pace and reassess its role in
the world economy and society as a whole. We hope
that this study represents one effort, among many
that must follow, to assess how the international
accounting community may or may not be reacting
to change.
Notes
1
IFAC associate members are required to adhere to
the same requirements as member organizations. We
therefore included both members and associates in our
main analyses. In supplemental tests, we performed the
analyses after eliminating the associate members and the
results were not qualitatively different than those
reported in Tables IVI.
2
In such cases, we have classified the organization as a
non-adopter. As a result of further analysis, we were able
to verify that three of the IFAC members that stated in
their membership survey that they had not adopted the
IFAC Code subsequently adopted the code. The three
organizations are (1) The Institute of Chartered Accoun-
tants in England & Wales, (2) The Institute of Chartered
Accountants in Ireland, and (3) The Institute of Char-
tered Accountants in Australia. We replicated our analy-
sis on the relationship between the adoption decision
and socioeconomic level after reclassifying these organi-
zations as adopters. The results were not qualitatively
different than those reported in Table VI.
3
We also conducted the analysis of whether the adop-
tion decision was related to socioeconomic status with
the lower and two middle income groups combined
 An Analysis of International Accounting Codes of Conduct
into one developing economies group. The results Wallace, R.: 1990, Survival Strategies of a Global
were not qualitatively different than those reported
in Table VI where we analyzed the income groups
separately.
World Bank: 2007, World Bank List of Economies (July
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Curtis Clements
College of Business Administration,
Abilene Christian University,
ACU Box 29340, Abilene TX 79699, U.S.A.
E-mail: curtis.clements@acu.edu
John D. Neill
College of Business Administration,
Abilene Christian University,
ACU Box 29329, Abilene TX 79699, U.S.A.
E-mail: john.neill@coba.acu.edu
O. Scott Stovall
College of Business Administration,
Abilene Christian University,
ACU Box 29336, Abilene TX 79699, U.S.A.
E-mail: scott.stovall@coba.acu.edu
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