The IFRS adoption, accounting quality, and banking performance: An evaluation of susceptibilities and financial stability in developing economies

Abstract

International Financial Reporting Standards (IFRS) ’s adoption increased attention to International Accounting Standard Regulations worldwide. It has opened the door for empirical analysis having different perceptions of mandatory IFRS adoption. This paper’s main objective is to examine the impact of accounting quality and IFRS adoption on Pakistan’s banking sector efficiency. We have employed the Malmquist productivity index, Roychowdhury’s Earnings Management, and modified learner index to conduct the empirical analysis. The results mean how much banking sector efficiency is affected by accounting quality and IFRS adoption. The results demonstrate that the banking sector efficiency significantly increases through accounting quality and IFRS. Furthermore, it can be seen that the foreign banks’ efficiency in Pakistan is less than other banks compared to public or private banks. Additionally, more earnings timeliness has been noted in large banks than medium and small banks in Pakistan. Preferably, the practice of quality accounting relies on disclosed information through financial statements. In contrast, the organizations may evade the losses once the information quality is precise and appropriate. The study provides valuable information to managers and other stakeholders.

Do depositors discipline the banking sector? Evidence from an emerging economy

“…Mateev et al (2022) show that supervision has a positive impact on credit risk of banks, results of the study also revealed that financial stability depended on the type of banking structure in the country such as conventional banking or Islamic banking system because both systems have different credit risk policies. Ma et al (2022) have highlighted that banks undergo extensive scrutiny when they misreport financial information and are subject to market discipline. This is consistent with the findings of Crockett (2002) and Stephanou (2010).…”

“…Ma et al (2022) have highlighted that banks undergo extensive scrutiny when they misreport financial information and are subject to market discipline. This is consistent with the findings of Crockett (2002) and Stephanou (2010).…”

Quality Of Financial Statement And The Factors That Influence It

“…Namely, accounting standards reduce the information content of financial statements, making them more rigid, and disclosure tends to be limited. (Ma et al, 2022), who researched banking in Pakistan, found that the application of the use of financial reporting standards (IFRS) would improve the quality of financial reports and even increase the efficiency and effectiveness of bank reporting. (Alawneh and Alawneh, 2022), who researched in Jordan, also found a positive and significant influence of the application of international financial standards (IFRS) on the quality and effectiveness of financial reporting in Jordan.…”

Unlocking the link between company attributes and sustainability accounting in shanghai: firm traits driving corporate transparency and stakeholder responsiveness

“…In the context of Chinese energy companies, Huafang et al (Huafang and Jianguo, 2007) identified a positive association between state ownership and firm size with carbon emission disclosures as a dimension of environmental transparency. While these studies provide initial evidence on company-level determinants, they require further extension to characterize sustainability accounting practices, including across different Chinese stock exchanges (Ikpor et al, 2022;Ma et al, 2022;Qian et al, 2022).…”