A Statistical Analysis of the Effects of the Development of Accounting and Auditing Standards on the Financial Soundness of Banks

Financial soundness of banks is vital not only for the firms but also countries in order to achieve sustainable economic development and the welfare of the society. There are many factors affecting financial soundness of banks both firm level and country level. In this study, it is tested whether development of auditing and accounting standards affects the soundness of banks or not for the 140 countries by using Kruskal-Wallis test. According to the Kruskal-Wallis test results, it can be argued that as auditing and accounting standards develops then financial soundness of banks rise. As a result, it can be concluded that the banking sector and the countries should give great importance to develop auditing and accounting standards in order to achieve better financial soundness of banks and sustainable economic development.