Corporate governance, compliance level of IFRS disclosure and value relevance of accounting information – Indonesian evidence

Krismiaji, Krismiaji; Surifah, Surifah

doi:10.14254/2071-8330.2020/13-2/14

Cited by 24 publications

(27 citation statements)

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“…The first strand is related to examining a firm's level of compliance with disclosure requirements of the International Accounting Standards (IAS)/IFRS and the applicability of certain standards in a particular environment (Van Zijl and Maroun, 2017;Shimamoto and Takeda, 2020). The second strand of research focuses on investigating the factors that affect the level of IFRS compliance; scholars examined the impact of firms' characteristics (e.g., Bova and Pereira, 2012;Lin, 2012;Lopes et al, 2016), corporate governance variables (e.g., Krismiaji and Surifah, 2020) and institutional factors (e.g., Avwokeni, 2016;Alzeban, 2018) on the level of compliance with IFRS requirements. The third strand is related to examining the impact of IFRS compliance on several variables, such as the disclosure level (e.g., Aksu and Espahbodi, 2016), firms' value and foreign direct investment (e.g., De George et al, 2013), decision making (e.g., Chandrasekar and Kumar, 2016) and voluntary disclosure (Uyar et al, 2019;Akman, 2011).…”

Section: Introductionmentioning

confidence: 99%

IFRS compliance in GCC countries: Do corporate governance mechanisms make a difference?

2021

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Section: Introductionmentioning

confidence: 99%

IFRS compliance in GCC countries: Do corporate governance mechanisms make a difference?

2021

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“…Krismiaji et al (2016) suggested in their research that IFRS enforcement in Indonesia emphasized only the association between IFRS and earning quality and ignored testing the value relevance of accounting information. Krismiaji and Surifah (2020) revealed an inconsistent research finding while comparing with previous research findings that associate IFRS enforcement and accounting information's quality for Indonesian companies. Sun and Sari (2016) asserted that IFRS convergence reduced the combined value relevance of accounting information.…”

Section: International Financial Reporting Standards Convergence and ...mentioning

confidence: 55%

Value relevance of accounting information during IFRS convergence period: comparative evidence between India and Indonesia

Srivastava

Muharam

2021

ARJ

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Purpose This study aims to examine the financial reporting quality during the International Financial Reporting Standards (IFRS) enforcement period in the emerging markets of India and Indonesia by using Ohlson’s (1995) valuation model. The study further endeavors to compare the quality of the reporting environment and its impact on stock prices for both these emerging economies by using a price model during the IFRS conversion period. Design/methodology/approach This paper aspires to obtain insights about the value relevance of accounting information during the IFRS enforcement period for India and its Southeast Asian neighbor, Indonesia which is identical in terms of inclusive growth and development. In that context, 3,325 Indian (National Stock Exchange indexed) and 815 Indonesian (Indonesian stock exchange indexed) firm-year observations were examined by using Ohlson’s price valuation model for five years, representing the IFRS adherence period. Findings The findings of the paper insinuated that the value relevance of book values and earnings, both, have increased throughout the IFRS enforcement period for both economies. However, the investigation revealed that the incremental interpretive power of earnings is more substantial and evident during the IFRS adherence phase than book values which indicates investor’s inclination toward earnings management over book values. Research limitations/implications The findings may assist the regulators, investors, firms and standard setters of both economies in examining the effectiveness of financial reporting curriculums as it brings forth informational improvement in the financial market. This study also outstretches the discussion on the subject in other emerging nations where the market is imperfect with insufficient information, poor enforcement and limited regulations. This investigation has few limitations such as limited data and period, only two emerging economies and two control variables, thus provide scope for future research. Social implications This paper endeavors to investigate and compare the value relevance of accounting information during IFRS convergence period between India and Indonesia with an aim to assist in improved decision making for both, regulatory bodies and market participants in both the countries. Originality/value The key contribution of the study is to examine whether the accounting information is value relevant during the IFRS convergence period for the two fastest-growing economies in Asia, India and Indonesia and it is the first such empirical research to the best of the author’s knowledge. The study is an extended contribution to the modest research administered in developing nations.

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“…In the light of this prior studies such as Ahmed and Karim (2005); Samaha and Stapleton (2008) and Al-Akra, Eddie, and Ali (2010) empirically examined International Financial Reporting Standards (IFRS) adoption in isolation or with other stream of finance literature within developed markets while Liu, Yao, Hu, and Liu (2011); Gordon, Loeb, and Zhu (2012) did theirs within developing markets. It is against this scenery that this research seeks to purposively choose three streams of literature namely IFRS adoption, board governance and accounting quality by examining the consequence of IFRS adoption and board governance on accounting quality as an extension and replication of Krismiaji and Surifah (2020) and in response to the call for future research by Mbir et al (2020).…”

Section: Introductionmentioning

confidence: 99%

International Financial Reporting Standards, Board Governance and Accounting Quality: Preliminary Ghanaian Evidence

Oppong

Bruce-Amartey

2022

102

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IFRS adoption’s effect and board governance on accounting quality from Ghanaian perspective was examined using OLS technique between a seven-year periods (2013-2019). From the study, IFRS adoption negatively impacts accounting quality in an insignificant manner. The insignificant nexus was due to lax implementation of regulations by institutions with IFRS and incentive-performance tied schemes presented to managers. Additionally, all but profitability and institutional ownership have positively significant impact on accounting quality whilst board governance negatively affect accounting quality though not statistically significant. Finally, moderating the role of board governance on IFRS - accounting quality relation, evidence established from the regression is that board governance does not moderate relationship between IFRS adoption and accounting quality using discretionary accruals. Our study captured effective corporate governance practices using composite board governance index to moderate effect of IFRS on the nexus between board governance and accounting quality serving as central motivation to contribute to literature.

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Corporate governance, compliance level of IFRS disclosure and value relevance of accounting information – Indonesian evidence

Cited by 24 publications

References 0 publications

IFRS compliance in GCC countries: Do corporate governance mechanisms make a difference?

IFRS compliance in GCC countries: Do corporate governance mechanisms make a difference?

Value relevance of accounting information during IFRS convergence period: comparative evidence between India and Indonesia

International Financial Reporting Standards, Board Governance and Accounting Quality: Preliminary Ghanaian Evidence

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