Effect of corporate governance attributes on IFRS compliance: evidence from a developing country
ISSN: 1472-0701
Article publication date: 17 November 2020
Issue publication date: 23 January 2021
Abstract
Purpose
This study aims to analyze the relationship between corporate governance attributes and the International Financial Reporting Standard (IFRS) compliance among Zambian listed companies.
Design/methodology/approach
Data was collected through content analysis of annual reports and audited financial statements of 20 Zambian listed companies for the period 2012 to 2018. This is a longitudinal study which involved panel data analysis. A Hausman test was conducted to select the model to use to run the panel regression analysis.
Findings
The results indicate a positive statistically insignificant relationship between board size, board independence and IFRS compliance. A statistically significant negative relationship between audit committee independence and IFRS compliance. However, there is a positive relationship between board members with accounting and auditing experience, the inclusion of women on the board and IFRS compliance.
Research limitations/implications
Limitation includes the narrow focus on listed companies only which cannot be generalized to other public interest and private companies in Zambia.
Practical implications
The study findings imply that corporate governance attributes such as the inclusion of qualified and experienced Chartered Accountants and women on the board will increase IFRS compliance. The appointment criteria of non-executive directors should be strengthened.
Originality/value
This is the first empirical study to analyze the relationship between IFRS compliance and corporate governance in Zambia. The study also responds to the call by the World Bank (2017) to empirically study IFRS compliance in Zambia and contributes to the scant literature in developing countries on determinants of IFRS compliance.
Keywords
Citation
Kabwe, M., Mwanaumo, E. and Chalu, H. (2021), "Effect of corporate governance attributes on IFRS compliance: evidence from a developing country", Corporate Governance, Vol. 21 No. 1, pp. 1-22. https://doi.org/10.1108/CG-03-2020-0103
Publisher
:Emerald Publishing Limited
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