Do Common Features Exist Among Countries That Locally Adopt IFRS?

Felski, Elizabeth

doi:10.5296/ijafr.v5i2.8325

Cited by 16 publications

(19 citation statements)

References 25 publications

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“…Table 3 also indicates that market capitalisation to GDP ( MCPL) variable data that relates to the ERMJA group exhibits the highest variable scores among the four adopter categories of ISAs. The data of MCPL that is relevant to the ERMJA group ranges from 0.02 to 1,254.47, with a higher average of 64.53 and a significant standard deviation of 126.65, indicating a considerable variation in the ERMJA group, which is consistent with the results of previous studies (Lasmin, 2011; Judge et al , 2010; Felski, 2015; Klibi and Kossentini, 2014).…”

Section: Resultssupporting

confidence: 90%

Financial market consequences of early adoption of international standards on auditing: international evidence

Elmghaamez

Gerged²,

Ntim

2020

MAJ

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Purpose This paper aims to investigate the effects of the early adoption of International Standards on Auditing (ISAs) on Financial Market Indicators (FMIs) from a diffusion of innovation (DOI) theory perspective. Design/methodology/approach Using panel data from 110 countries in a period that spans from 1995 to 2014, this study applies an ordinary least squares regression model to investigate the financial consequences of adopting ISAs. This analysis was supplemented with estimating a fixed-effects and two-stage least squares regression models to address any concerns regarding the possible existence of endogeneity problems. Findings This study reports three key findings. First, the authors find that early ISAs adoption has a negative effect on several financial market consequences, namely stock market integration, market capitalisation, market turnover, market return, market development, stock price volatility and stock trading volume. Second, using an alternative measure to the one that is proposed by DOI theory, the authors found that some financial indicators have been significantly improved after ISAs adoption, but only for listed firms that prepared their financial statements under International Financial Reporting Standards and audited by ISAs simultaneously. Finally, the financialindicators of European stock markets, however, have insignificantly shrank post the mandatory adoption of ISAs in 2006. Practical implications The empirical evidence raises questions about how ISAs were enforced and implemented. For example, countries that adopted ISAs at early stages may have been dominated mostly by recently established stock exchanges. This implies a crucial need to determine and apply the best type of auditing regime that can increase investors trust and enhance the credibility of stock markets information, which might ultimately advance the FMIs over time significantly. Originality/value To-date, studies investigating the impact of the adoption of ISAs on FMI from a DOI theory perspective are virtually non-existent. The study, therefore, seeks to contribute to the extant literature by examining the influence of ISAs adoption on a wide range of FMIs.

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Section: Resultssupporting

confidence: 90%

Financial market consequences of early adoption of international standards on auditing: international evidence

Elmghaamez

Gerged²,

Ntim

2020

MAJ

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“…Prior literature considers accounting harmonisation a controversial issue because of a large existing debate around whether the adoption of unified accounting standards will be beneficial (Radebaugh et al , 2006). The financial bodies of some countries around the world do not want to concede their financial and accounting sovereignty, for example, India and Japan fully resist the adoption of IFRS (Felski, 2015). Therefore, according to this debate, the complexity of a transition from local accounting principles to international accounting standards appeared which needs further action from accounting boards to avoid such complexity.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Resistive factors of delaying IFRS adoption in Saudi Arabia listed firms

Almasarwah

2019

JFRA

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Purpose This study aims to explore and identify the factors that affect Saudi Arabia's decision concerning the adoption of International Financial Reporting Standards (IFRS), and particularly the resistive factors that delay full IFRS adoption. It identifies the way in which Saudi Arabia’s social, political, educational and religious context influence the adoption of IFRS and the delay in doing so. Design/methodology/approach A mixed methodology is used in this research, including both quantitative (questionnaires) and qualitative (semi-structured interviews) data analysis. Whereas, using mixed methods led to enhance the results. Findings The findings show that globalisation, accounting bodies and political circumstances were found to be positively related to IFRS adoption in Saudi Arabia. In contrast, culture and accounting development were found to have a negative impact on the IFRS adoption. Interestingly, the results showed that religion has no effect on IFRS adoption in Saudi Arabia. Practical implications This paper can be of use to both researchers and practitioners interested in investigating more resistive factors that could affect future IFRS adoption in developing countries. Moreover, the findings could be useful to senior managers and legislators in Saudi Arabia firms, in relation to decisions about enhancing the quality of adopting IFRS. Originality/value This research provides an important contribution to the existing literature by using a comparative method to present an in-depth exploration of the factors that affect countries, drawing on the framework of the neo-institutional perspective in a developing country.

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“…Our study is different from the above-mentioned international studies primarily because we focus on within-country comparability and the determinants that drive the variation in within-country comparability across countries post-IFRS adoption. Earlier literature including Larson (1993), Hope et al (2006), Judge et al (2010) and Felski (2015, 2017) all suggest different countries have different needs for IFRS adoption and the post-adoption effects on accounting variables are not homogeneous. Given that the same accounting standard is adopted by different EU countries, within-country accounting comparability can be different due to fundamental characteristics at a country level and firm level.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

The determinants of accounting comparability around the world

Ross

Shi

Xie

2019

ARA

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Purpose The purpose of this paper is to investigate country-level and firm-level determinants of within-country accounting comparability for 16 European Union countries plus the USA in the post-International Financial Reporting Standards adoption period. Design/methodology/approach The authors use ordinary least squares regression to test the hypotheses with a correction for heteroscedasticity. Findings The authors find that firms in countries with rules-based accounting, higher quality public auditor work environments, stricter enforcement of accounting standards and more reliance on equity-market financing have higher within-country comparability with each other. At the firm-level, the authors find that firms which are larger, engage in less earnings management, and have lower return-on-asset volatility have higher within-country comparability with each other. Research limitations/implications The authors use one measure of accounting comparability. Alternative measures of accounting comparability could test the hypotheses more completely. Practical implications The findings of the paper may help the regulators make more efficient policies to establish an efficient financial market within their country. Originality/value The paper is the first, to the authors’ knowledge, to identify country-level and firm-level determinants of within-country accounting comparability. It contributes to the accounting literature by completing the theory of international accounting comparability from the within-country perspectives, as prior literature focuses on the cross-country perspective of international accounting comparability.

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Do Common Features Exist Among Countries That Locally Adopt IFRS?

Abstract: Although International Financial Reporting Standards (IFRS)

Cited by 16 publications

References 25 publications

Financial market consequences of early adoption of international standards on auditing: international evidence

Financial market consequences of early adoption of international standards on auditing: international evidence

Resistive factors of delaying IFRS adoption in Saudi Arabia listed firms

The determinants of accounting comparability around the world

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