Drivers of mandatory disclosure in GCC region firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ismail Ufuk Misirlioglu ◽  
Jon Tucker ◽  
Helmi Abdulhameed Boshnak
Keyword(s):  
Financial Reporting ◽  
Voluntary Disclosure ◽  
State Ownership ◽  
International Accounting Standards ◽  
Mandatory Disclosure ◽  
Firm Level ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Key Drivers ◽  
Using Data

Purpose This paper aims to investigate firm-level variations in the extent of mandatory disclosures and address the drivers of mandatory disclosure using data from the Gulf Co-operation Council (GCC) region. Design/methodology/approach The extent of mandatory disclosure is examined using a disclosure index created with reference to 24 International Financial Reporting Standards (IFRSs). Findings The authors find that the extent of mandatory disclosure required by applicable IFRSs/International Accounting Standards increases with international presence, group firms, the level of voluntary disclosure, firm age and the education level of company financial controllers. It decreases with firm size and the proportion of institutional share ownership. The degree of board independence is positively related to the level of mandatory disclosure in firms with no state ownership. Profitability positively affects the level of mandatory disclosure to a greater extent in more liquid GCC firms. The results confirm that there is a greater sensitivity of mandatory disclosure to loss than to profit. Loss increases, whilst profit decreases, the extent of mandatory disclosure. Research limitations/implications The results promote further understanding of international financial reporting differences in an emerging country setting. Practical implications The findings provide a detailed insight to investors, financial analysts, practitioners and academics. Originality/value The authors develop a highly granular mandatory disclosure index in a developing country setting and identify key drivers of such disclosure.

Adoption of IFRS in Japan: challenges and consequences

2015 ◽  
Vol 27 (1) ◽  
pp. 3-27 ◽  
Author(s):  
Noriyuki Tsunogaya ◽  
Andreas Hellmann ◽  
Simone Domenico Scagnelli
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Accounting Standards ◽  
Accounting System ◽  
International Accounting Standards ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Institutional Complementarity ◽  
Accounting Environment ◽  
Social Organizational

Purpose – The purpose of this study is to provide a rigorous and holistic analysis of the main features of the Japanese accounting environment. It also raises issues related to the adoption of International Financial Reporting Standards (IFRS) in Japan. Design/methodology/approach – For the purpose of investigating the Japanese accounting system, this study applies the accounting ecology framework developed by Gernon and Wallace (1995) and provides a content analysis of relevant meetings of the Business Accounting Council of Japan. Findings – The findings of this study provide evidence that it would be problematic to require the adoption of IFRS for all listed companies in Japan. The main reason for this is that the Japanese policymakers and standard-setting bodies follow two objectives: enhancing the international comparability of financial reporting and maintaining institutional complementarity between financial reporting and other infrastructures such as accounting-related laws. Research limitations/implications – This study is relevant for accounting researchers and professionals with an interest in Japanese accounting practices. It is also useful for the International Accounting Standards Board and representatives of countries planning to adopt IFRS in the future. Originality/value – The findings of this study show that contextual issues such as social, organizational and professional environments cannot be ignored in the adoption of IFRS in Japan.

Accounting for leases – lessons from COVID-19

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alan Teixeira
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Accounting Standards ◽  
Financial Accounting ◽  
International Accounting Standards ◽  
Reporting Standards ◽  
Financial Accounting Standards Board ◽  
Content Type ◽  
Financial Reporting Standards ◽  
Setting Process

Purpose The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) have given relief to lessees in response to the coronavirus (COVID-19) pandemic. However, it is not clear why any relief from the requirements in International Financial Reporting Standards (IFRS) or the Accounting Standards Codification (ASC) should be necessary. The purpose of this paper is to highlight weaknesses in how the IASB and FASB developed their leases Standards, and why those Standards are not robust enough to cope with a shock to the economic system. Design/methodology/approach The COVID-19 relief suspends some features of the leasing requirements rather than changing them. What if other economic or regulatory events cause the same circumstances to arise? Findings Have COVID-19 exposed weaknesses in the leasing standards that should have been avoided when they were developed or is COVID-19 the problem? Originality/value Analysis of actual board discussions and staff papers is unusual and provides insights into the standard-setting process.

Using arguments and myths to lobby over controversial accounting issues: evidence from Japan

2020 ◽  
Vol 32 (3) ◽  
pp. 355-390
Author(s):  
Noriyuki Tsunogaya ◽  
Andreas Hellmann
Keyword(s):  
Financial Reporting ◽  
Financial Services ◽  
Accounting Standards ◽  
Fair Value ◽  
Network Effect ◽  
International Accounting Standards ◽  
Content Type ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Stakeholder Groups

Purpose This study aims to examine the (overt) arguments and (covert) myths the Business Accounting Council (BAC) members have used to lobby over controversial accounting issues, such as the application of fair value accounting (FVA) and the adoption of International Financial Reporting Standards (IFRS) in Japan. Design/methodology/approach The authors used a content analysis to examine 85 statements included in multiperiod BAC meeting minutes and 68 articles prepared by International Accounting Standards Board (IASB) representatives from Japan. Findings The results reveal that together with the arguments, myths were created and amplified by opponents of FVA and the Financial Services Agency to hide the latter’s strong regulatory power. They created these myths, using covert stories of the importance of manufacturing activities and tax accounting (for small- and medium-sized enterprises [SMEs]), to oppose mandatory IFRS adoption in Japan and, thus, to maintain vested rights in preparing the Japanese generally accepted accounting principles and Japanese accounting standards for SMEs. Originality/value First, this study contributes to the lobbying literature by focusing on the coalition (network) effect of influential stakeholder groups. Second, although lobbying activities have been investigated mostly using comment letters, this study reviews multiperiod BAC meeting minutes and articles prepared by IASB representatives from Japan. Third, the study examines both overt arguments and covert myths, both of which are important in unmasking the fundamental structures of power within influential organizations, such as government agencies and standard-setters.

An investigation of the level of compliance with international accounting standards (IAS 1) by listed firms in Bahrain Bourse

2016 ◽  
Vol 9 (2) ◽  
pp. 254-276 ◽  
Author(s):  
Fatema Ebrahim Alrawahi ◽  
Adel Mohammed Sarea
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Annual Reports ◽  
International Accounting ◽  
International Accounting Standards ◽  
Content Type ◽  
Listed Firms ◽  
Financial Reporting Standards ◽  
Industry Type ◽  
Regulatory Bodies

Purpose This study aims to investigate the association between seven firm-specific characteristics and the level of mandatory compliance with International Accounting Standards (IAS) 1 by firms listed on Bahrain Bourse. Design/methodology/approach A disclosure index is used to measure the extent of compliance with IAS 1. Each of the 36 sampled firms’ annual reports were examined against the index for the financial year ending December 31, 2013. Findings The results reveal an overall compliance of 83 per cent. Regression results report that only audit firm size, profitability and industry type have a positive and significant association with IAS 1 disclosure requirements. Practical implications This study should be particularly relevant to regulatory bodies in Bahrain for strategizing and encouraging compliance with IAS 1 by listed firms. Originality/value Additionally, the study contributes to financial reporting literature relating to the Gulf Cooperation Council countries, mainly Bahrain. Bahrain is a financial hub, and it is interesting to examine how it presents its financial statements to investors and the degree of its compliance with International Financial Reporting Standards since its adoption in 2007.

scholarly journals The extent of compliance with FRS 101 standard: Malaysian evidence

2017 ◽  
Vol 18 (1) ◽  
pp. 87-115 ◽  
Author(s):  
Azhar Abdul Rahman ◽  
Mohd Diah Hamdan
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Audit Committee ◽  
Content Type ◽  
Corporate Compliance ◽  
Financial Reporting Standards ◽  
Compliance Level ◽  
Using Data ◽  
Analysis Models ◽  
The Impact

Purpose The purpose of this paper is to investigate Malaysian companies’ compliance with mandatory accounting standards. Specifically, this study examines the efficacy of agency-related mechanisms on the degree of compliance with Financial Reporting Standards (FRS) 101, Presentation of Financial Statements. It so proceeds by focussing on corporate governance parameters (board characteristics and ownership structure) and other firm characteristics. Design/methodology/approach Using data drawn from a sample of 105 Malaysian companies listed on the ACE market in 2009, the authors employ multiple regression analysis models to establish whether selected corporate governance and company-specific characteristics (proxying for agency-related mechanisms) are related to the degree of disclosure compliance. Findings The results indicate that the overall disclosure compliance is high (92.5 per cent). Furthermore, only firm size is positively associated with the degree of compliance. The other variables, those consisting of board independence, audit committee independence, CEO duality, the extent of outside blockholders’ ownership and leverage, do not show any significant relationship with the degree of compliance. Research limitations/implications This study focusses on only one accounting standard (FRS 101) that is mandatory in Malaysia. FRS 101 is both structured and rigid, leaving no room for companies to conceal any particular information. The sample of Malaysian companies selected is restricted to those listed only on the ACE market. As such, the results cannot be generalised to every company in Malaysia. Practical implications These results have important implications for policy makers because they suggest that whilst agency-related mechanisms may motivate compliance with mandatory standards, full compliance may be unattainable without regulations. Originality/value This is the only study in Malaysia to investigate the impact of regulatory requirements on corporate compliance level by companies listed on the new ACE market, which was introduced by the Bursa Malaysia in August 2009. This study contributes to the literature by examining the effects of both company-specific characteristics (such as company size, company age, liquidity, etc.) and corporate governance parameters on the degree of corporate compliance with mandatory disclosure, simultaneously, in contrast with prior studies which have examined them in isolation.

Auditor rotations and audit quality

2019 ◽  
Vol 27 (4) ◽  
pp. 639-660 ◽  
Author(s):  
Devi Sulistyo Kalanjati ◽  
Damai Nasution ◽  
Karin Jonnergård ◽  
Soegeng Sutedjo
Keyword(s):  
Financial Reporting ◽  
Audit Quality ◽  
Stock Exchange ◽  
Multivariate Regression Analysis ◽  
Cumulative Number ◽  
Firm Level ◽  
Content Type ◽  
Audit Firm ◽  
Audit Firms ◽  
Using Data

Purpose The purpose of this paper is to investigate the association between audit rotation – at the audit partner and audit firm level – and audit quality. As mentioned in the literature, audit rotation has several benefits, and one of them is it can bring a fresh look to audit tasks and subsequently improve audit quality. Moreover, audit itself can help a client to improve its financial reporting. However, ineffective communication between predecessor and successor audit partners or audit firms, and pseudo-rotation can hamper that benefit. Design/methodology/approach This study uses multivariate regression analysis to test its hypotheses. Using data from companies listed on the Indonesia Stock Exchange, the sample consists of 688 company-year observations covering the period 2003–2016. Findings This study finds that the cumulative number of audit partner rotations is positively associated with audit quality, indicating that rotations at the audit partner level will enhance audit quality. Conversely, it finds that the cumulative number of audit firm rotations is negatively associated with audit quality. Practical implications The study’s findings may assist regulators in crafting standards regarding audit rotation. As the findings show, audit partner rotation will improve audit quality, but the audit firm rotation will decrease audit quality. As this study tries to explain the decreasing audit quality from audit firm rotation could be a consequence of ineffective communication or pseudo audit firm rotation. Regulators should try to tackle these problems. Originality/value Instead of using tenure as a proxy for a rotation, this study creates a new proxy named the cumulative number of audit partner and audit firm rotations to provide evidence on the benefits of audit rotation.

Standard setting in times of technological change: accounting for cryptocurrency holdings

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Paola Ramassa ◽  
Giulia Leoni
Keyword(s):  
Technological Change ◽  
Financial Reporting ◽  
National Standard ◽  
Disruptive Technology ◽  
International Accounting Standards ◽  
Content Type ◽  
Accounting Regulation ◽  
Financial Reporting Standards ◽  
New Class ◽  
Regulatory Processes

PurposeThis paper explores how the International Accounting Standards Board (IASB) has dealt with the emerging issue of accounting for cryptocurrencies by investigating its constituents' expectations and the motivations underlying its regulatory response.Design/methodology/approachThe theoretical lens of regulatory space is used to analyse the four-year debate around cryptocurrency holdings and informs the extensive thematic analysis of public documents, meetings recordings and comment letters on the topic.FindingsFacing national standard setters' initiatives to regulate accounting for cryptocurrency, the IASB defended its position in the regulatory space through an agenda decision based on ewct 2xisting standards, which was finalised by the International Financial Reporting Standards Interpretation Committee (IFRS IC) despite criticism from constituents and Board members.Research limitations/implicationsThe paper provides insights into the IASB approach to a regulatory vacuum regarding a new class of items, which derive from a new and rapidly-evolving technology. Disruptive technology impacts the contested arena of accounting regulation, in which the constituents ask for new solutions and the IASB tries to resist such pressures, while defending its position.Practical implicationsThe paper sheds light on the growing importance of agenda decisions in the IFRS environment and on the limits of the IASB long regulatory process in the circumstance of emerging accounting issues deriving from rapidly-evolving technology.Originality/valueThis investigation is timely and relevant as it considers the regulatory issues arising from disruptive technological innovations (i.e. cryptocurrency), shedding light on the limits of regulatory processes in times of technological change.

Firm characteristics and compliance with IAS/IFRS

2019 ◽  
Vol 17 (3) ◽  
pp. 383-410
Author(s):  
Ali Alnaas ◽  
Afzalur Rashid
Keyword(s):  
Financial Reporting ◽  
North Africa ◽  
Design Methodology ◽  
Institutional Ownership ◽  
Stock Exchanges ◽  
Reporting Standards ◽  
Firm Characteristics ◽  
Firm Level ◽  
Content Type ◽  
Financial Reporting Standards

Purpose This paper aims to examine the influence of firm characteristics on harmonisation of companies listed on the Egypt, Morocco and Tunisia Stock Exchanges. Design/methodology/approach This study uses a checklist based mainly on the International Financial Reporting Standards (IFRS). Findings The findings of the study are 6that the level of compliance with IFRS was higher in 2010 than in 2005. Multiple regression analysis indicates that the level of compliance with IFRS increases with company size, institutional ownership, industry and language of disclosure. Research limitations/implications The findings of this study suggest that both institutional- and firm-level forces influence the harmonisation process. Originality/value This study contributes to the literature on accounting harmonisation in the context of North Africa.

scholarly journals ANALISA TINGKAT KEPATUHAN PENGUNGKAPAN WAJIB KONVERGENSI IFRS 2012 : STUDI KASUS PERUSAHAAN CONSUMER GOODS YANG TERDAFTAR DI BURSA EFEK INDONESIA 2011-2012

2017 ◽  
Vol 7 (1) ◽  
Author(s):  
Kurniawati Kurniawati
Keyword(s):  
Financial Reporting ◽  
Consumer Goods ◽  
Stock Exchange ◽  
Accounting Standards ◽  
Fair Value ◽  
International Financial Reporting Standards ◽  
International Accounting Standards ◽  
Reporting Standards ◽  
Mandatory Disclosure ◽  
Financial Reporting Standards

<p><em>A recent trending issue in the world of accounting is the issue of the convergence of the 2012 </em><em>International Financial Reporting Standards (IFRS). The process of this convergence has started since 2008 and is expected to be finished by 2011, so that it may be fully implemented in 2012. There are several main characteristics of IFRS, i.e. principal based, fair value, and disclosure.</em></p><p><em>This research is conducted with the purpose of assessing the level of compliance with mandatory disclosure IFRS Convergence 2012 for consumer goods companies listed in the Indonesian Stock Exchange within the period of 2011-2012. The sample is selected using </em><em>purposive sampling techniques and twenty seven (27) research samples are acquired in the consumer goods industry. To measure the level of compliance with mandatory disclosure, the </em><em>Dichotomous method is used in this research by using items from the </em><em>IFRS Presentation &amp; Disclosure Checklist issued by </em><em>Deloitte in 2012.</em></p><p><em>The result of this research shows that the average level of compliance with mandatory disclosure IFRS Convergence 2012 for consumer goods companies is 75.95% which can be seen from four PSAK, i.e. PSAK 14, PSAK 16, PSAK 13 and PSAK 30.The highest level is from PSAK 16, followed by PSAK 14 in second, and PSAK 13 and PSAK 30 in third and fourth respectively.</em></p><p><em> </em></p><p><strong><em>Keyword:</em></strong><em> </em><em>International Financial Reporting Standards (IFRS) Convergence,  Compliance, Mandatory disclosure level</em><em>, International Accounting Standards, C</em><em>onsumer goods company</em></p>

Aggregate financial disclosure practice: evidence from the emerging capital market of Kuwait

2018 ◽  
Vol 19 (4) ◽  
pp. 626-647 ◽  
Author(s):  
Issa Dawd
Keyword(s):  
Financial Reporting ◽  
Voluntary Disclosure ◽  
Multivariate Regression ◽  
Emerging Market ◽  
Developed Countries ◽  
Reporting Standards ◽  
Mandatory Disclosure ◽  
Content Type ◽  
Disclosure Requirements ◽  
Disclosure Practice

PurposeThe purpose of this paper is to evaluate the mandatory and voluntary disclosure practice and its determinants in Kuwait, an emerging market that applies International Financial Reporting Standards (IFRS).Design/methodology/approachThe study employs two main methods: an index-based analysis of mandatory, voluntary and aggregate disclosure as well as univariate and multivariate regression analysis of the determinants of disclosure levels.FindingsThe results show that the average aggregate disclosure level is 44 per cent. None of the sample companies complied fully with the disclosure requirements of IAS/IFRS. The extent of voluntary disclosure is also relatively low, although the documented amount represents an increase on that revealed in earlier studies in Kuwait. The multivariate regression results reveal that firm size is positively associated with voluntary disclosure, while mandatory disclosure is negatively linked to profit.Research limitations/implicationsThe findings are based on evidence from a single country and further work is needed to ascertain the extent of generalisability.Practical implicationsThe results of the study have implications for policy makers, professional accounting bodies and regulators as they contribute to the debate on to develop and encourage both compliance with mandatory disclosure requirements and voluntary practice. The evidence also has implications for attempts to derive full understanding of the factors driving disclosure practices in the developing world, and how these differ from behaviour in the world’s richest nations.Originality/valueThe study contributes to the existing literature in the area in two main ways. First, as compliance with mandatory disclosure requirements in developed countries is total (or near to total) in most cases, it has been the subject of little empirical enquiry. By focussing instead on a developing nation – one that has adopted IFRS – the analysis facilitates the provision of novel evidence regarding both the nature and determinants of failure to follow disclosure rules. Second, prior studies generally fail to distinguish between financial and non-financial firms, despite differences in reporting standards and norms across the two groups; the present study makes this distinction.

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