Do IFRS disclosure requirements reduce the cost of capital? Evidence from Australia

Saha, Amitav; Bose, Sudipta

doi:10.1111/acfi.12744

Cited by 18 publications

(11 citation statements)

References 62 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…A similar conclusion about the link between disclosures scope and cultural factors appears in another research (Abdullah et al, 2015). Some authors agree that more focus should be put on a more robust enforcement regime to improve current disclosure practices adopted by companies preparing their financial reports following IFRS (Saha and Bose, 2021;Hellman et al, 2018;Abad et al, 2020). However, research insisting on the opposite also exists.…”

Section: Literature Reviewmentioning

confidence: 53%

“…Furthermore, the improvement of accounting information quality may be linked with the decrease in systemic risk (Xing and Yan, 2018). Saha and Bose (2021) examined the link between a level of IFRS disclosure requirements and a weighted average cost of capital and cost of debt capital. They debated the relative costs and benefits of IFRS disclosure and concluded that the IFRS disclosures they examined provided economic benefits to users by reducing firms' cost of capital.…”

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

Business Combination Under Common Control (BCUCC) - What Kind of Disclosure is Enough? The Polish Experience

Janowicz¹

2021

ERSJ

View full text Add to dashboard Cite

Purpose:The assessment of the scope and quality of disclosures about BCUCC, which are excluded from the scope of IFRS, published by Polish public companies in their annual financial reports prepared following IFRS. Design/Methodology/Approach: The research uses qualitative and quantitative methods. The research methodology was based mainly on critical analysis of the literature on the subject, quantitative methods, content analysis of financial statements, and synthesis of results. Findings: Most Polish public companies that did not account for BCUCC using IFRS provided at least minimal scope of disclosures necessary for users of financial information to decide the effects that BCUCC had on the information presented in the financial statement. Companies that applied the Accounting Act to substitute for the lacking IFRS solution related to BCUCC provided a higher level of disclosure than other companies. Practical Implications: The use of national accounting regulations may provide a better quality of disclosures about BCUCC. Originality/Value: This paper provides insight into how the problem is dealt with in practice and may be used to form a commentary on the current IASB project focusing on BCUCC.

show abstract

Section: Literature Reviewmentioning

confidence: 53%

Section: Literature Reviewmentioning

confidence: 99%

Business Combination Under Common Control (BCUCC) - What Kind of Disclosure is Enough? The Polish Experience

Janowicz¹

2021

ERSJ

View full text Add to dashboard Cite

show abstract

“…Nowadays, the focus of the accounting standards is on better communications (Baksaas & Stenheim, 2019;Saha & Bose, 2021;Wee, Tarca, & Chang, 2014). The specific area relating to communications is accounting disclosures, usually located in the notes to financial statements (Cheung & Lau, 2016).…”

Section: Introductionmentioning

confidence: 99%

Is Tax Accounting Information Relevant to Users? The Case of Indonesia

Pratama

2022

IJAEFA

View full text Add to dashboard Cite

This research aimed to investigate whether the tax accounting contained in financial statements is relevant to users’ decision-making and represents compliance with the tax laws. In this research, tax accounting information is classified into (1) tax recognition items (TRI) and (2) tax disclosure items (TDI). Survey data were collected from 131 professional tax accountants in Indonesia. The study employed two analysis methods: (1) the paired sample test, to determine whether there was any gap between the current condition and the expected condition of tax accounting information; and (2) regression analysis, to establish whether tax accounting information affected the relevance of financial statements. The results showed that (1) there were more gaps in TRI than in TDI; and (2) while TRI created relevance, TDI did not. This result indicates that tax accounting information is essential to improve decision-making. However, there are gaps and inadequate information. These results also imply that the accounting standards setter should improve the standards so that tax accounting provides value to financial statement users.

show abstract

“…Gao (2010) adds that a higher quality of disclosure may not necessarily be associated with a reduction in the cost of capital. Previous studies have demonstrated an indirect effect of a reduction in the cost of capital in firms around the world Karamanou & Nishiotis, 2009;Lee, Walker, & Christensen, 2010;Saha & Bose, 2021). This situation can also be verified in lower developed countries (Gasparini, 2015;Lima, 2011;Lima, Lima & Gotti 2018;Moscariello, Skerratt, & Pizzo 2014;Silva & Nardi, 2014), although the evidence in this kind of context is still scarce .…”

Section: Discussionmentioning

confidence: 91%

“…The authors point out that firm-level incentives could compensate the lack of a strong institutional framework, corroborating to the emergence of economic benefits of IFRS adoption (Lima et al, 2018). Saha and Bose (2021) found evidence that IFRS requirements are negatively related to the cost of capital in Australian firms, contributing to the debate on the relative costs and benefits of IFRS disclosure requirements of financial statements.…”

Section: Hypothesis Developmentmentioning

confidence: 82%

Essays on cash holdings, accounting quality and cost of capital under IFRS adoption in Latin America

Tortoli¹

View full text Add to dashboard Cite

This thesis aims to explore the relations between cash holdings, accounting quality and cost of capital in the context of IFRS adoption in Latin America. In the first essay, we verified the effect of IFRS adoption on accounting quality, especially, earnings management practices. The results show that the adoption of IFRS standards reduced the scope of earnings management practices in Latin American firms. The results also show that IFRS adoption has decreased cash holdings in these firms, as a consequence of higher quality standards. Additional findings suggest that the benefits of IFRS adoption is more pronounced in non-ADR firms since ADR firms present strong incentives to improve the level of accounting information quality. In the second essay, we analyzed the effects of IFRS adoption in the relationship between cash holdings and the cost of capital in Latin American firms. Our findings demonstrated that IFRS adoption impacted the relationship between cash holdings and cost of equity in Latin American firms. That is, when the firms increase cost of equity post-IFRS adoption, they also increase cash levels. Additional analysis demonstrated that IFRS adoption impacted cost of equity only in non-internationalized firms since these firms are more likely to face challenges in relation to the cost of capital than its counterparts. For the cost of debt, we did not find significant results since creditors already have their own mechanisms for loans guarantees. Finally, in the third essay, we analyzed whether discretionary accruals measured by gross income are value relevant in the context of IFRS adoption, comparing with discretionary accruals measured by net income. In addition, we analyzed whether discretionary accruals measured by gross income have complementary information to cash holdings, impacting value relevance. The results demonstrated that discretionary accruals measured by gross income influences value relevance and, the results are sensitive to the context of IFRS adoption. For discretionary accruals measured by net income, we did not find significant results. Additional findings suggest that in context of better accounting quality, the information related to gross income became more reliable, being a better way to predict future performance of firms than cash holdings. In general, this thesis seeks to contribute to literature demonstrating that the adoption of IFRS standards influences the relations between cash holdings, accounting quality and cost of capital in Latin American countries, emerging fruitful insights for future research.

show abstract

Do IFRS disclosure requirements reduce the cost of capital? Evidence from Australia

Cited by 18 publications

References 62 publications

Business Combination Under Common Control (BCUCC) - What Kind of Disclosure is Enough? The Polish Experience

Business Combination Under Common Control (BCUCC) - What Kind of Disclosure is Enough? The Polish Experience

Is Tax Accounting Information Relevant to Users? The Case of Indonesia

Essays on cash holdings, accounting quality and cost of capital under IFRS adoption in Latin America

Contact Info

Product

Resources

About