Volume 17 Issue 2, August 2022
ARTICLE INFO
Article History:
Received: 21 June 2021
Accepted: 8 July 2022
Published: 31 August 2022
Impact of Cultural and Environmental Factors on the Adoption of AAOIFI Accounting Standards in MENA Countries: Logistic Regression and Neural Networks
Marwa Aloui1, Yosr Hrichi2* and Chokri Slim3
1PhD Student, High Institute of Accounting and Business Administration, University of Manouba, Tunisia
2Accounting Assistant Professor, Faculty of Economics and Management of Nabeul University of Carthage, Tunisia
3Econometric Professor, High Institute of Accounting and Business Administration, University of Manouba, Tunisia
The purpose of this study was to investigate the effect of cultural and environmental factors on the decision of adoption of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) in MENA countries. Precisely, we empirically diagnosed the impact of culture, the origin of the legal system, economic growth, the presence of National Shariah Council and the political freedom on the adoption of AAOIFI. Data from 44 countries belonging to the MENA region was used and compared between 26 countries adopting the standards of AAOIFI and 18 not adopting during the period 2007-2017. The paper used a Logit regression analysis to model the binary decision to adopt the AAOIFI or not. Additionally, neural networks were performed to test the robustness of the results of the logistic regression. We found that all macroeconomic factors affected the decision of adoption. Furthermore, the neuronal model showed that the level of education and the political freedom were the most important factors influencing the adoption of AAOIFI.
Keywords: AAOIFI standards, culture, legal origins of law, political freedom, economic growth, logistic regression, neuronal networks.