IFRS adoption and firms’ opacity around the world: what factors affect this relationship?

Abstract

Purpose This paper aims to identify what are the moderating factors affecting the relationship between firms’ adoption of international financial and reporting standards (IFRS) and the firm’s opacity. Design/methodology/approach This study uses the meta-analysis methodology from Hunter et al. (1982) to find if the mere IFRS adoption reduces firm’s opacity and a meta-regression from Stanley and Jarrell (1989) to identify the moderating factors that may influence this relationship. Findings Contrary to previous studies, this study finds a low, negative and nonsignificant correlation between IFRS adoption and firms’ opacity, but this relationship depends on the geographical region. Using 34 results from 28 studies from different continents published between 2005 and 2018 this study finds that IFRS adoption reduces opacity in countries with common law (COML) and with more authorities’ oversight and power to enforce the rules. Originality/value This study finds two institutional commonalities between different previous studies that intend to assess the impact of the IFRS adoption upon firms’ opacity: the legal system and the authorities’ oversight power.

The IFRS 16 implementation in Asia-Pacific countries: enhancing asset pronouncements or opaque information’s conveyance

“…Therefore, this study shows that different accounting standards could result in varying conservative levels and decrease the value relevance (Thijssen and Iatridis, 2016), such as with IFRS 16's implementation. Mongrut et al (2021) explained the assets' opaqueness is due to the reduced transparency of the accounting information. Zheng (2020) associates the opacity, or information asymmetry, between the internal and external party users.…”

“…Second, it contributes to completing the literature gap on the pros and cons of IFRS 16’s implementation (Alabood et al , 2019; Giner and Pardo, 2018; Morales-Díaz and Zamora-Ramírez, 2018), especially regarding information blurring. The extant literature explains earnings management volatility due to asset opacity (Mongrut et al , 2021), primarily on the financial statement items affected by the standard’s implementation. Third, this research provides regulators and standards boards with insights to develop accounting standards similar to those in developing countries (Abdullah et al , 2023).…”

Market reaction to firms' investments in CSR projects

“…According to the findings of Xu et al (2014), CSR has a strong beneficial impact on corporate reputation and brand credibility. This theory has been tested empirically several times, for example, in a study (Song et al, 2020;Mongrut et al, 2021) which reveals the positive impact of information disclosure about corporate social responsibility (CSR) on the reputation of a firm, which, in its turn, significantly contributes to a firm's financial performance. Madden et al (2012) suggest that the disclosure of socially responsible information about the firm may provoke the "halo effect", which means that people are willing to pay more for a well-known brand.…”

“…This theory has been tested empirically several times, for example, in a study (Song et al. , 2020; Mongrut et al. , 2021) which reveals the positive impact of information disclosure about corporate social responsibility (CSR) on the reputation of a firm, which, in its turn, significantly contributes to a firm's financial performance.…”

الدور المعدل لتبنى المعاییر الدولیة لإعداد التقاریر المالیة Ifrs للعلاقة بین غموض التقاریر المالیة وخطر الانهیار المستقبلى لأسعار الأسهم "دلیل من الشركات غیر المالیة المقیدة بالبورصة المصریة"

“…‫بممات‬ ‫مقم‬ ‫بحثف‬ ‫حت‬ ‫نمبحثاا‬ ‫أو‬ (e.g. Jin and Myers, 2006;Hutton et al, 2009;DeFond et al, 2015;Lim et al, 2016;He, 2019;Chae et al, 2020;Andreou et al, 2021;Mongrut et al, 2021 (e.g., Campbell et al, 2008;Hutton et al, 2009;Kim et al, 2011;Kim et al, 2014;Lee, 2016;Chae et al, 2019;Li et al,…”