The common law system is characterized by the existence of formal insti- tutions which are better at enforcing rulcs and regulations aimed at protecting minority shareholders’ interests [LaP0rta et al., 2002; North and Weingast, 1989]. On the other hand, code law countries develop informal networks and relationships instead of formal institutions to perform the enforcement tasks [Ball, Kothari and Robin, 2000]. Extant literature seems to establish that ac- counting information produced in common law systems is of higher quality compared to their code law counterparts [Ball et al., 2000; Ali and Hwang, 2000; Hung, 2001].