Financial reporting incentives for conservative accounting: The influence of legal and political institutions

Bushman, Robert M.; Piotroski, Joseph D.

doi:10.1016/j.jacceco.2005.10.005

Cited by 845 publications

(596 citation statements)

References 55 publications

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“…To business organisations, the adoption of IFRS will result in greater transparency and understandability, reduced the cost of capital to organisations, reduced national standard-setting costs, (Leuz &Verrecchiia, 2008;Odia & Ogiedu, 2013), enhance efficient capital allocation (Bushman & Piotroski, 2006), wider market development (Ahmed & Duellman, 2011), improved and higher market liquidity and value (Mihai, Ionaşcu, & Ionaşcu, 2012), boosted comparability (DeFond, Hu, Hung, & Li, 2011Săcărin, Bunea & Gîrbină, 2013), enhanced transparency of results and facilitated cross border movement of capital (Bhattacharjee & Hossain 2010;Mihai et al, 2012). Others include easier comparability of financial data across borders and access to investment opportunities, increased credibility of domestic markets to foreign capital providers and potentials foreign merger partners (Bhattacharjee & Hossain 2010;Madawaki, 2014).…”

Section: Benefits Of Ifrs To Stakeholdersmentioning

confidence: 99%

Perceived Benefits and Challeges of IFRS Adoption in Ghana: Views of Members of Institute of Chartered Accountants, Ghana (ICAG)

Mbawuni¹

2017

IJFR

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This paper provides an empirical evidence regarding the perceived benefits and challenges of International Financial Reporting Standard (IFRS) adoption in Ghana. It draws on rich body of knowledge in IFRS from both developed and developing countries to develop a conceptual framework for the perceived benefits and challenges that come with IFRS adoption. It used data from a cross-section of 762 members of the Institute of Charted Accountants, Ghana. This study found that a number of perceived benefits and challenges with the adoption of IFRS in Ghana, notable among the benefits was the ease of comparability of financial data across borders, and the top-most challenge was the continuous amendments to IFRS. There were few differences in evaluation between old and young accountants among the respondents. The theoretical and managerial implications are discussed. This study contributes to the limited empirical research regarding the perceived benefits and challenges of IFRS adoption in Sub-Saharan African in general and Ghana in particular.

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Section: Benefits Of Ifrs To Stakeholdersmentioning

confidence: 99%

Perceived Benefits and Challeges of IFRS Adoption in Ghana: Views of Members of Institute of Chartered Accountants, Ghana (ICAG)

Mbawuni¹

2017

IJFR

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“…Other external factors to the company, such as the legal environment, the stock-exchange laws and the economic policy of the country as well as the culture of the actors determine in a significant way the level of the conservatism (Watts, 2003a, b;Bushman and Piotroski, 2006) were not studied within this research. It will be interesting to study on a sample of companies belonging to several countries the relationship between accounting conservatism and institutional and economic factors as well as the structures of corporate governance.…”

Section: Discussionmentioning

confidence: 99%

An Empirical Examination of the Relationship between Board of Director Composition, Ownership Structure and Accounting Conservatism

Jarboui¹

2013

IJEFM

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Abstract:In the present study, we investigate the relationship between corporate governance and accounting conservatism. We examine our model in the context of French firms over the period 2007-2011. We predict that an effective set of corporate governance mechanisms is positively related to a higher level of accounting conservatism. Empirical tests show that accounting conservatism depends mainly on the effectiveness of the board, the management shareholding, and the audit quality.

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“…Extant research provides evidence on the differences between European countries in their level of protection of shareholders' rights, liability standards, the strength of the system of legal enforcement, the level of ownership concentration, the degree of financial and tax alignment, or the importance of the equity market (e.g., Hung, 2001;La Porta, Lopez-de-Silanes, & Shleifer, 2006, La Porta, Lopezde-Silanes, Shleifer, & Vishny, 1998. Moreover, research documents the key role played by these institutional characteristics in shaping accounting quality (e.g., Ali & Hwang, 2000;Ball, Kothari, & Robin, 2000;Burgstahler, Hail, & Leuz, 2006;Bushman & Piotroski, 2006).…”

Section: Accounting Quality After Ifrs Adoptionmentioning

confidence: 99%

Examining dual accounting systems in Europe

Macías

Muiño

2011

The International Journal of Accounting

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After adoption of International Financial Reporting Standards (IFRS) for consolidated financial statements by European listed companies, a number of European countries still require the use of local standards in the preparation of legal entity financial statements. This study investigates whether this requirement can be explained by a low demand for high quality financial reporting and an orientation of accounting toward the fulfilment of regulatory needs in these countries. Specifically, using accounting quality as an indicator of the focus of accounting on capital providers' needs, we compare accounting quality between countries permitting and prohibiting the use of IFRS in individual financial statements. Consistent with our expectations, we find that countries requiring the use of local standards in the preparation of legal entity financial statements exhibit a significantly lower level of accounting quality, both prior to and after IFRS adoption. We interpret these results as evidence that these countries have local standards more oriented toward the satisfaction of regulatory needs, rather than investors' needs. Furthermore, since differences in accounting quality persist after the implementation of IFRS, results suggest that firms in these countries face a lower demand for high quality financial reporting.Keywords: IFRS endorsement; Accounting quality; Value relevance; Domestic GAAP ☆ We appreciate the financial support from the Spanish Ministry of Education through grants SEJ 2007 and SEJ-2010, and the Comunidad de Madrid through grant CCG06-UC·M/TIC-0766. We thank the editor and two anonymous referees for their valuable comments and suggestions. In addition, we are especially grateful to one of the referees for help in editing this manuscript. The paper also benefited from comments of the participants at the 2008 annual EAA Congress in Rotterdam. All remaining errors are our responsibility only.

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Financial reporting incentives for conservative accounting: The influence of legal and political institutions

Cited by 845 publications

References 55 publications

Perceived Benefits and Challeges of IFRS Adoption in Ghana: Views of Members of Institute of Chartered Accountants, Ghana (ICAG)

Perceived Benefits and Challeges of IFRS Adoption in Ghana: Views of Members of Institute of Chartered Accountants, Ghana (ICAG)

An Empirical Examination of the Relationship between Board of Director Composition, Ownership Structure and Accounting Conservatism

Examining dual accounting systems in Europe

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