Effect of corporate governance attributes on IFRS compliance: evidence from a developing country

Abstract

Purpose This study aims to analyze the relationship between corporate governance attributes and the International Financial Reporting Standard (IFRS) compliance among Zambian listed companies. Design/methodology/approach Data was collected through content analysis of annual reports and audited financial statements of 20 Zambian listed companies for the period 2012 to 2018. This is a longitudinal study which involved panel data analysis. A Hausman test was conducted to select the model to use to run the panel regression analysis. Findings The results indicate a positive statistically insignificant relationship between board size, board independence and IFRS compliance. A statistically significant negative relationship between audit committee independence and IFRS compliance. However, there is a positive relationship between board members with accounting and auditing experience, the inclusion of women on the board and IFRS compliance. Research limitations/implications Limitation includes the narrow focus on listed companies only which cannot be generalized to other public interest and private companies in Zambia. Practical implications The study findings imply that corporate governance attributes such as the inclusion of qualified and experienced Chartered Accountants and women on the board will increase IFRS compliance. The appointment criteria of non-executive directors should be strengthened. Originality/value This is the first empirical study to analyze the relationship between IFRS compliance and corporate governance in Zambia. The study also responds to the call by the World Bank (2017) to empirically study IFRS compliance in Zambia and contributes to the scant literature in developing countries on determinants of IFRS compliance.

Risk management and corporate governance of Islamic banks: evidence from GCC countries

“…Other studies investigated the relationship between CG and the International Financial Reporting Standards (IFRS) compliance, where a positive but insignificant association between board size, board independence and IFRS compliance and a significant negative relationship between audit committee independence and IFRS compliance in Zambian listed companies were found. The same study evidenced that IFRS compliance is positively affected by the board members with accounting and auditing experience and the inclusion of women on the board (Kabwe et al, 2020). Alhammadi et al (2020) concluded that CG's more effective oversight and strategic guidance could have led to a more prudent strategy.…”

Effects of quick response to COVID-19 with change in corporate governance principles on SMEs’ business continuity: evidence in Vietnam

“…Moreover, this study examines corporate governance in its moderating role in helping businesses to overcome the challenges posed by the COVID-19 pandemic. This adds a novel point to this study because current literature shows that corporate governance was widely explored in different settings (Kabwe et al , 2021; Rehman and Hashim, 2021, 2020; Aslam and Haron, 2021; Süsi and Jaakson, 2020; Adedeji et al , 2020; Shahar et al , 2020; Al Maqtari et al , 2020; Sadiq et al , 2020; Usman, 2020; Wang et al , 2019), although very few studies have explored it in a moderating role as can be seen in the present research. Furthermore, this study focusses on corporate governance principles (CGP) towards a sustainable and competitive advantage, while most current studies mainly study corporate governance mechanisms and characteristics, such as board components and ownership structure.…”

Corporate Governance Practices and Organization Performance Among Deposit Taking Microfinance Institutions in Nairobi County, Kenya

“…Poorly managed companies are therefore likely to be less profitable, have a higher chance of insolvency, have lower values, and pay out less to its shareholders (Robert, Lyria, & Mbgogo, 2016). The status of chief executive officer duality, board diversity, board size, and disclosure of information about the business to stakeholders, as well as the supervisory function of the directors and board independence, are used to operationalize CG (Kabwe, & Chalu, 2020). As a result, each business strives to ensure that its board is not only diverse but also well-structured in order to properly carry out the given responsibilities.…”