This empirical-analytical study aims to provide a comparison between the levels of audit activity regulation in banking institutions and evaluate the relationship between the degree of regulation and the characteristics of national banking systems. To this end, a database containing data from a survey conducted with the national banking supervisory and regulatory authorities of 172 countries that is maintained by the World Bank was used. Descriptive statistics revealed that the highest levels of regulation are recorded in the most developed nations as well as Middle Eastern, North African, European and Central Asian countries. The study also confirmed that Brazil has a higher level of regulation than the international average. Tests were carried out using regressions to evaluate the relationship between the level of auditing regulations and the characteristics of banking sectors; it was evident that countries with higher levels of domestic credit provision by the banking sector and more profitable banks impose more requirements regarding the performance of auditors. In contrast, there is less regulation in countries where state banks participate more in the financial system and where there are more restrictions on the activities of banking institutions. A positive association between a banking sector's degree of concentration and the level of auditing regulation was not found. Finally, it was noted that, in 2000, the first year in which the employed survey was conducted, the level of regulation was lower than in the other years, whereas in 2007, the final year of the survey, the level of regulation was higher than in previous years. These results confirm the findings in the literature that auditing standards are likely to become more stringent over time as the demand for more rigorous requirements accumulates, especially during credibility crises.
Audit; Regulation; Banking system; Auditing standards; Banks
