The Effect of the Mandatory IFRS Adoption on Audit Fees in Malaysia

2021 ◽  
pp. 171-187
Author(s):  
Yosra Makni Makni Fourati ◽  
Dorra Bougacha
Keyword(s):  
Stock Exchange ◽  
Audit Fees ◽  
Annual Reports ◽  
Additional Test ◽  
Publicly Traded ◽  
Empirical Results ◽  
Ifrs Adoption ◽  
Final Sample ◽  
Mandatory Adoption ◽  
The Mean

This study examines the effect of the mandatory IFRS adoption on audit fees in an emergent context, such as the case of Malaysia. Using a comprehensive dataset of all publicly-traded Malaysians companies, the authors quantify an economy-wide increase in the mean level of audit costs after the IFRS transition. The final sample consists of 204 companies listed on the stock exchange of Malaysia, and publishes their information on audit fees in their annual reports allowed on the site of the Malaysian scholarship (Boursa Malaysia). Empirical results suggest that there has been some increase in audit fees in Malaysia after the mandatory adoption of IFRS in 2012. But this increase is considered more or less significant because Malaysia adopted the IFRS voluntarily in 2006. To discuss this meaning, the authors added an additional test that makes the results more robust.

scholarly journals Semi-monthly effect in stock returns: new evidence from Bombay Stock Exchange

2017 ◽  
Vol 14 (3) ◽  
pp. 160-172 ◽  
Author(s):  
Shakila B. ◽  
Prakash Pinto ◽  
Iqbal Thonse Hawaldar
Keyword(s):  
Health Care ◽  
Stock Returns ◽  
Stock Exchange ◽  
Consumer Durables ◽  
Empirical Results ◽  
Significant Difference ◽  
The Mean ◽  
Daily Stock Returns ◽  
New Evidence ◽  
Care Index

Semi-monthly effect is a kind of calendar anomalies which is less explored in the financial literature. The main objective of this paper to investigate the presence of semi-monthly effect in selected sectoral indices of Bombay Stock Exchange (BSE). The study uses the daily stock returns of five sectoral indices viz S&P BSE Auto Index, S&P BSE Bankex, S&P BSE Consumer Durables Index, S&P BSE FMCG Index and S&P BSE Health Care Index for the period of 10 years starting from 1st April 2007 to 31st March 2017. The data were analyzed using two approaches namely calendar days approach and trading days approach. To test the equality of mean returns for the two halves of the month, Mann-Whitney U test is used. The empirical results of the study did not provide any evidence for the presence of semi-monthly effect in the selected sectoral indices. Nevertheless, BSE Auto Index showed significant difference in the mean returns of first half and second half of trading month during the study period.

scholarly journals PENGELUARAN R&D DAN KINERJA PERUSAHAAN MANUFAKTUR DI BURSA EFEK INDONESIA YANG DIMODERASI OLEH USIA PERUSAHAAN

2019 ◽  
Vol 4 (2) ◽  
Author(s):  
Rahmat Setiawan ◽  
Denny Hardiko Harmasanto
Keyword(s):  
Financial Performance ◽  
Manufacturing Industry ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Annual Reports ◽  
Manufacturing Companies ◽  
Final Sample ◽  
Net Profit ◽  
Development Expenditure ◽  
Research Population

The purpose of this study is to examine the effect of research and development expenditure on the company's financial performance and prove the influence of corporate age moderation. The research population consisting of 140 manufacturing companies listed on the Indonesia Stock Exchange was selected using the purposive sampling method. The final sample size is 113 companies that provide annual financial statements from 2012-2017. The unbalanced panel data analysis uses variables in the company's annual reports that are tested using OLS regression. The results found that companies investing in R&D experienced a 3% increase in sales compared to companies that did not spend in R&D. Further testing also found that the age of the company moderated the relationship between R&D expenditure and financial performance, where older companies that invest in R&D produced 0.1% more sales and 0.6% higher profits than younger companies in the manufacturing industry. The conclusion of this study is that the effect of R&D expenditure on sales and net profit cannot be directly felt in the current year. R&D spending like other types of investment requires time to be able to contribute to the company's sales and net profit. The findings of this study provide support that R&D spending is a driving force for innovation in endogenous growth theories.

The Impact of the Mandatory Adoption of IFRS in the Fees of Auditing in Companies of BM&FBovespa

2015 ◽  
pp. 172-194 ◽  
Author(s):  
Eduardo Vinícius Bassi Murro ◽  
Tayrine Rodrigues Munhoz ◽  
Guilherme Bittencourt Teixeira ◽  
Isabel Lourenço
Keyword(s):  
Negative Impact ◽  
Financial Statements ◽  
Audit Fees ◽  
Quality Level ◽  
Positive Relation ◽  
Significant Relation ◽  
Final Sample ◽  
Mandatory Adoption ◽  
The Impact

This study aims to investigate if the mandatory adoption of the IFRS by the Brazilian companies listed in BM&FBovespa has made an impact on the audit fees. The final sample was made by 151 companies, between 2009 and 2012. To restrict the relations, other control variables of the size of the companies, of the turnover of auditing companies and of the quality level of the published financial statements were listed. The results made evident that the mandatory adoption of the IFRS represented a significant increase of 20.71% in the auditing fees. It has also been noticed that a positive relation between the auditing fees charged by the services and the size of the companies. However, the rotation of the auditing companies has generated a negative impact, reducing the fees paid to the independent auditors. Related to the quality of the financial statements, it was not verified a statistically significant relation.

The effect of mandatory XBRL and IFRS adoption on audit fees

2016 ◽  
Vol 12 (2) ◽  
pp. 109-135 ◽  
Author(s):  
Yuan George Shan ◽  
Indrit Troshani
Keyword(s):  
Financial Reporting ◽  
Developing Economies ◽  
Stock Exchange ◽  
Audit Fees ◽  
Listed Companies ◽  
Emerging Economy ◽  
Economic Consequences ◽  
Content Type ◽  
Ifrs Adoption ◽  
The Impact

Purpose – The purpose of this paper is to evaluate the impact of the International Financial Reporting Standards (IFRS) and eXtensible Business Reporting Language (XBRL) on audit fees based on evidence from listed companies operating in an emerging economy. Whilst IFRS constitute high-quality accounting standards, XBRL represents a technology standard that can enhance the usability of IFRS and overall financial reporting transparency. Design/methodology/approach – Multivariate analyses are used on a sample of 1,798 firm-year observations between 2000 and 2011 from companies listed in the Shanghai Stock Exchange that were subject to XBRL and IFRS adoption mandates. Findings – The main results suggest that XBRL has a main negative effect on audit fees which is weaker for larger firms. Additionally, the authors find that IFRS increases audit fees for all companies. Whilst this effect is positive for firms of different sizes, it is weaker for larger firms. Research limitations/implications – Whilst the findings are applicable to the selected sample and may or may not be generaliseable to other economies, they can provide important implications for both regulators and companies that are undertaking IFRS convergence and XBRL implementation projects in developing economies around the world. Originality/value – This study offers a timely assessment of the economic consequences of IFRS and XBRL on listed companies operating in an emerging economy, in addition to providing an important basis upon which further research can be designed in order to extend the analysis.

scholarly journals Mandatory IFRS Adoption and Real/Accruals Bases Earnings Management in the UK

2021 ◽  
Vol 10 (1) ◽  
pp. 25-39
Author(s):  
Mohammad I. Almaharmeh ◽  
Adel Almasarwah ◽  
Ali Shehadeh
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Robust Regression ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Listed Firms ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Mandatory Adoption ◽  
The Uk

Here, the link between the mandatory adoption of International Financial Reporting Standards (IFRS) and Real Earnings Management (REM), as well as Accrual Earnings Management (AEM), will be examined for non-financial listed firms in the London Stock Exchange. Robust regression analysis of the mandatory IFRS adoption will be conducted on the panel data, as well as earnings management using three AEM models and three REM models. Mixed results with respect to the qualities of AEM and REM were notably garnered, with mandatory IFRS adoption positively relating to the Roychowdhury of abnormal cash flow and the Roychowdhury of abnormal production. Meanwhile, the Roychowdhury of abnormal discretionary expenses, standard Jones, and Kothari negatively related to mandatory IFRS adoption, whilst modified Jones showed an insignificant relation to mandatory IFRS adoption. Changes in IFRS adoption and guidelines for UK firms may have an impact on AEM and REM, and, as predicted, mandatory IFRS adoption mostly affects the Kothari model followed by the standard Jones model as proxies for accounting earnings quality.

scholarly journals Audit Fee Premium for Industry Specialization: A Developed Country Perspective

2019 ◽  
Vol 26 (2) ◽  
pp. 1
Author(s):  
Muhammad Shahin Miah
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
National Level ◽  
Audit Fees ◽  
Significant Shift ◽  
Audit Pricing ◽  
Developed Country ◽  
Industry Specialization ◽  
Audit Fee ◽  
Mandatory Adoption

This paper examines the effects of industry specialization (city-level, nationallevel, and joint-level) on audit pricing in the Australia. By using Australian Stock Exchange (ASX) listed companies, this study documents that auditors who are industry specialists at both city-and national-level charge significantly higher audit fees compare to those auditors who are specialists either only at city-level or only at national-level industry specialist. However, in further analysis, this study documents that firms who are city-level industry specialists they charge relatively higher audit fees than nationallevel industry specialists, which is consistent with prior research on audit fee premiums studies concentrated in Australia. The greater audit fees charged by city-level industry specialists auditors are possibly attributed to recent changes in accounting regulations environment in Australia (e.g., mandatory adoption of IFRS). Such a significant shift in financial reporting environment due of IFRS adoption can affect audit expertise which may be reflected in this study. This study findings are robust in a set of alternative tests following prior research.

scholarly journals The Effect of Audit Quality on Accruals Earnings Management in Nigerian Listed Firms

2019 ◽  
Vol 8 (4) ◽  
pp. 4894-4897
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Quality ◽  
Stock Exchange ◽  
Audit Fees ◽  
Annual Reports ◽  
Management Level ◽  
Listed Firms ◽  
The Public ◽  
Creative Accounting

Earnings manipulation studies are of utmost importance to both the shareholders and stakeholders because of its effect in investment and management decisions. The practices are directly affecting the quality of financial reporting and increase information asymmetry between the management and shareholders. Thus, Audit Quality is one of the tool academicians use in measuring the level of earning practices in the organizations. However, this study investigated the possible effect of audit quality towards the change of earnings management level among the Nigerian listed firms. The study used all the public listed firms in the main flow of the Nigerian Stock Exchange (NSE) as a population from the year 2012 until 2017. Sixty-three selected companies were selected as a sample based on the filtration criteria of the study. The financial data was obtained from the Thompson Reuters DataStream, and the corporate governance data was from the annual reports and accounts of the companies. Audit quality and accrual model was used to test the relationship between the study variable. The study applied multiple regression to test the model. It was revealed from the regression that audit quality is negatively significant with accrual earnings management. This finding is indicating that any increases in the unit of audit fees will decrease the earnings management of the selected firms. Thus, the finding is supporting agency theory and is contrary to the assumption of creative accounting theory. The result of this study will assist the relevant authorities in decision making and policy setting towards the best practices of the Nigerian listed firms.

scholarly journals The Impact of International Financial Reporting Stanadard (IFRS) Adoption on Accounting Quality in Nigerian Listed Money Deposit Banks

2019 ◽  
Vol 5 (1) ◽  
pp. 49
Author(s):  
Rabiu Saminu Jibril
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
Developing Nations ◽  
Annual Reports ◽  
Accounting Quality ◽  
Reporting Standard ◽  
Ifrs Adoption ◽  
Data Analyses ◽  
Research Findings ◽  
The Impact

This study was aimed to empirically evaluate the impact of adoption of IFRS on accounting quality in Nigeria using the money deposit banks. The study utilized the annual reports and accounts of 15 banks listed in the Nigerian Stock Exchange for the period of 2011 to 2014 (that is two years before and two years after adoption); using liner regression analysis was employed in analyzing the data generated for the study. Based on the data analyses, the study found that large loss recognitions have increased in the post adoption period. Based on the research findings, the researcher recommends that developing nations should adopt IFRS as their financial reporting standard as it is capable of increasing their accounting quality. The researcher also recommends that research should be conducted to analyze why IFRS improves the accounting quality based on standard by standard, not the whole package.

How Much Does IFRS Cost? IFRS Adoption and Audit Fees

2012 ◽  
Vol 88 (2) ◽  
pp. 429-462 ◽  
Author(s):  
Emmanuel T. De George ◽  
Colin B. Ferguson ◽  
Nasser A. Spear
Keyword(s):  
Financial Reporting ◽  
Small Firms ◽  
Financial Statements ◽  
Audit Fees ◽  
Securities And Exchange Commission ◽  
Data Availability ◽  
Publicly Traded ◽  
Financial Reporting Standards ◽  
Response Data ◽  
Ifrs Adoption

ABSTRACT This study provides evidence of a directly observable and significant cost of International Financial Reporting Standards (IFRS) adoption, by examining the fees incurred by firms for the statutory audit of their financial statements at the time of transition. Using a comprehensive dataset of all publicly traded Australian companies, we quantify an economy-wide increase in the mean level of audit costs of 23 percent in the year of IFRS transition. We estimate an abnormal IFRS-related increase in audit costs in excess of 8 percent, beyond the normal yearly fee increases in the pre-IFRS period. Further analysis provides evidence that small firms incur disproportionately higher IFRS-related audit fees. We then survey auditors to construct a firm-specific measure of IFRS audit complexity. Empirical findings suggest that firms with greater exposure to audit complexity exhibit greater increases in compliance costs for the transition to IFRS. Given the renewed debate about whether the Securities and Exchange Commission (SEC) should mandate IFRS for U.S. firms, our results are of timely importance. Data Availability: Data are publicly available from the sources identified in the paper. Survey response data are available from the authors upon request.

The Determinants and Financial Statement Effects of IFRS Adoption in Nigeria

2016 ◽  
pp. 319-341
Author(s):  
J. O. Odia
Keyword(s):  
Stock Exchange ◽  
Earnings Quality ◽  
Least Square ◽  
Financial Statement ◽  
Annual Reports ◽  
Return On Equity ◽  
Ordinary Least Square ◽  
Ifrs Adoption ◽  
Operating Cash Flow ◽  
The Impact

The chapter examines the determinants and financial statement effect s of IFRS adoption in Nigeria. It also investigate into the impact of effect of the adoption of IFRS on accounting figures and ratios in the financial statements of 50 companies quoted in the Nigerian Stock Exchange. The determinants considered include firm's characteristics (firm size, operating cash flow, leverage, turnover, growth in turnover, profitability, liquidity and earnings quality) and corporate governance variables (board size, board independence and audit type). The data were obtained from the annual reports of companies listed in the Nigerian Stock Exchange between 2011 and 2013 and was analyzed using the ordinary least square (OLS) and logistic regression which were used to test for determinants of IFRS adoption while the independent t-test was used to examine the financial statement effects. With regard to the determinants, the empirical result indicates only profitability and earnings quality have significant but negative association with IFRS adoption. Moreover, IFRS adoption has significant effect on the return on equity.

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