Karim Mhedhbi and Daniel Zeghal
The purpose of this paper is to examine empirically the association between the adoption of international accounting standards (IAS/IFRS) and the performance of emerging capital…
Abstract
Purpose
The purpose of this paper is to examine empirically the association between the adoption of international accounting standards (IAS/IFRS) and the performance of emerging capital markets.
Design/methodology/approach
Data related to 31 developing countries with capital markets were used. The authors performed univariate analyses (means comparison before and after the use of IAS/IFRS), as well as multivariate analyses (estimation of models of panel data), to test the hypothetical relations set up in the paper.
Findings
The results suggest that the performance of emerging capital markets is significantly and positively associated with IAS/IFRS use. They are consistent with several empirical investigations which highlighted the relevance of financial information under IAS/IFRS in emerging capital markets.
Practical implications
Several organizations and decision-makers including the IASB, governments, capital markets regulators and international investors should find the policy implications of this paper very meaningful.
Originality/value
To the best of the authors’ knowledge, the relationship between the use of IAS/IFRS and the performance of emerging capital markets based on a group of countries has not yet been explored.
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Daniel Zeghal and Karim Mhedhbi
The purpose of this paper is to analyze the consequences of using international accounting standards (IAS/IFRS) for the development of capital markets located in developing…
Abstract
Purpose
The purpose of this paper is to analyze the consequences of using international accounting standards (IAS/IFRS) for the development of capital markets located in developing countries (emerging capital markets).
Design/methodology/approach
The authors conduct an empirical study using a sample of 38 developing countries with capital markets, starting by comparing the means of the different measures studied before and after the use of IAS/IFRS. A multivariate statistical analysis is conducted based on the estimation of a model of panel data with fixed effects.
Findings
The results show that the development of the emerging capital markets is positively and significantly associated with the use of international accounting standards.
Practical implications
The paper's findings are of interest to several different parties, primarily the national accounting standardization body, the IASB, many international organizations and international investors.
Originality/value
The paper describes an empirical study, conducted on a group of developing countries, which provides a better understanding of the potential consequences of the use of IASB standards. The paper is also a meaningful contribution to the international accounting literature, as it examines an interesting subject that has not yet been investigated.
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Khaled Samaha and Hichem Khlif
The purpose of this paper is to review a synthesis of theories and empirical studies dealing with the adoption of and compliance with IFRS in developing countries in an attempt to…
Abstract
Purpose
The purpose of this paper is to review a synthesis of theories and empirical studies dealing with the adoption of and compliance with IFRS in developing countries in an attempt to provide directions for future research.
Design/methodology/approach
The review focusses on four main streams including: first, the motives for IFRS adoption; second, corporate characteristics and the degree of compliance with IFRS; third, the economic consequences of IFRS adoption and finally; fourth, the use of regulation as an enforcement mechanism to monitor compliance with IFRS. The authors review empirical studies specifically devoted to developing countries.
Findings
Regarding the first stream relating to IFRS adoption, the macroeconomic decision of adopting IFRS in developing countries can be justified by two main theories which are: the economic theory of network (Katz and Shapiro, 1985) and isomorphism (DiMaggio and Powell, 1991), however, empirical evidence in developing countries to confirm these theories is limited. Regarding the second stream relating to corporate characteristics and the degree of compliance with IFRS, the authors find that the results are mixed. Regarding the third stream relating to the economic consequences of IFRS adoption, it seems that the evidence is still limited in developing countries especially with respect to the impact of IFRS adoption on foreign direct investment, cost of equity capital and earnings management. Regarding the fourth and final stream in relation to regulation, enforcement and compliance with IFRS, the authors find that research is very limited. It was evidenced in the very few research studies conducted, that global disclosure standards are optimal only if compliance is monitored and enforced by efficient institutions.
Practical implications
The author’s study attempts to provide a foundational knowledge resource that will inform practitioners, researchers and regulators in developing countries about the relevance of the different theories that exist in the accounting literature to explain the adoption of and compliance with IFRS.
Originality/value
Compared to developed countries, the four streams outlined remain under-researched in developing countries. Therefore, researchers should examine these topics in developing countries to inform practitioners, regulators and the capital market about the effects of adopting IFRS and their relevance to developing countries. In addition, researchers should embark on identifying new theories to explain the adoption of and compliance with IFRS in developing countries that take into consideration the socioeconomic culture of these settings.
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Vincent Tawiah and Pran Boolaky
This paper is an appraisal of existing literature on IFRS in Africa. In a bid to determine what exists and what is missing in the literature, the authors have reviewed three…
Abstract
Purpose
This paper is an appraisal of existing literature on IFRS in Africa. In a bid to determine what exists and what is missing in the literature, the authors have reviewed three streams of studies, namely, adoption, compliance/harmonisation and consequences of IFRS in Africa, with the aim to suggest what remains to be investigated on IFRS in Africa.
Design/methodology/approach
This paper uses a systematic review approach including synthesis of a variety of archival materials. Articles on Africa were summarised under three main headings: adoption, compliance/harmonisation and consequences of IFRS.
Findings
This review finds limited research on IFRS in Africa. It reveals that although past cross-continent studies claimed to cover Africa, they are limited to only a few countries and mainly predominated by South Africa. The authors identified only one study that investigated the impact of economic and cultural factors on IFRS adoption in Africa and few cross-continent studies but considering only very few African countries. Regarding compliance, four studies concluded that compliance with IFRS is dependent on a firm’s characteristics. The authors also identified that some of the generalised findings from prior research on consequences of IFRS are of limited significance in the African context.
Originality/value
This study suggests the determinants of adoption, compliance and consequences of IFRS in Africa are different if studied separately. It identifies some gaps in the literature that require further research, specifically, IFRS on taxation, fair valuation practices and the institutional capacities of countries to implement the standards.
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Adel Sarea and Monsurat Ayojimi Salami
This paper aims to examine the level of Islamic social reporting (ISR) disclosure of Islamic banking in Gulf Cooperative Council (GCC) countries using a checklist based on…
Abstract
Purpose
This paper aims to examine the level of Islamic social reporting (ISR) disclosure of Islamic banking in Gulf Cooperative Council (GCC) countries using a checklist based on Accounting and Auditing Organization for Islamic Financial Institution (AAOIFI) standards.
Design/methodology/approach
A quantitative method – Tobit Model – is adopted in this study. The unweighted disclosure method used to measure the ISR disclosure checklist consist of 51 items in Islamic banks (IBs) in the GCC countries. The stakeholder theory and legitimacy theory are used to investigate the possible banking performance factors affecting the accounting practices such as ISR disclosure in IBs.
Findings
The findings show that the ISR disclosure index is linked to the IBs’ performance indicators in GCC countries. The result indicates both Islamic banking profitability and age establish positive and statistically significant relationship with ISR disclosure while leverage establishes significant negative relationship with ISR disclosure. This implies that Islamic banking profitability, leverage, and age are essential bank performance indicators that make ISR disclosure worthy of doing even in the presence of Islamic bank stakeholders in GCC countries. This finding linked compliance with the mandatory disclosure recommendations of AAOIFI Standard No. 7, as well as voluntary disclosure.
Research limitations/implications
This study used cross sectional data for the year 2019, which is considered more recent despite its being a year data analysis. However, future research should consider mix method as well as more analysis tools provided their number of observations are sufficient enough.
Social implications
The study identifies the factors that may enhance Islamic financial institutions, including Islamic banking in GCC countries, to comply with ISR disclosure. The application of this study supports Accounting standards setters to consider standards that support ISR disclosure in Islamic banking in different countries.
Originality/value
To the best of the authors’ knowledge, this study is novel in exploring the level of ISR disclosure in Islamic banking in GCC countries by using a checklist based on AAOIFI standard No. 7 and establishes the relationship between ISR disclosure index and IBs profitability, leverage, as well as age of Islamic banking in operation.
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Pran Boolaky and Kamil Omoteso
This paper aims to investigate the position of international financial services centres (IFSCs) in the International Federation of Accountants’ countries’ status on the adoption…
Abstract
Purpose
This paper aims to investigate the position of international financial services centres (IFSCs) in the International Federation of Accountants’ countries’ status on the adoption of International Standards on Auditing (ISA) and assess the factors influencing ISA adoption in these centres.
Design/methodology/approach
This research drew its data from various sources, including the World Economic Forum (WEF) data set, the World Bank Report on Observation of Standards and Codes, the World Development Indicators and the Economic Intelligence Unit Report on Democracy Index on 50 countries classified as IFSCs. The adoption status is then regressed on a number of variables of interest. To establish that the results are robust, the authors used a combination of different regression techniques comprising OLS, multinomial and logistic regressions.
Findings
In addition to the gross domestic product growth and education level, this paper adds new evidence to the literature by reporting the positive association between the level of democracy and the enforcement of securities’ regulation on ISA adoption. It argues that political, economic, social and legal factors impact on ISA adoption in the IFSCs.
Research limitations/implications
The sample size is limited to 50 from a population of 99 IFSCs because of the lack of data. Some of the independent variables are basically archival data. Reliance is placed on WEF with regard to the measurement of protection of minority interest, securities and exchange regulations and on the Economic Intelligence Unit for democracy index.
Practical implications
This paper stresses the importance of ISAs in IFSCs and the role of political power and the enforcement of securities laws on the adoption of ISA.
Originality/value
This study fills the research gap relating to the absence of empirical studies on ISA adoption and its drivers in IFSCs.
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This paper aims to explore the alignments of the Takaful industry between the Islamic and the International Financial Reporting Standards (IFRS) requirement and the subsequent…
Abstract
Purpose
This paper aims to explore the alignments of the Takaful industry between the Islamic and the International Financial Reporting Standards (IFRS) requirement and the subsequent social and political consequences.
Design/methodology/approach
Meta-analysis of thorough examination of 1* to 4* relevant peer-reviewed journals in the academic journal guide 2015 of the Association of Business School from the period when first IFRS was issued in 2005 to 2012 and where Indonesia declared to fully adopt IFRS. The examination also includes some other appropriate Indonesian and Islamic accounting publications. The paper employs comparative analysis between IFRS, Auditing Organization for Islamic Financial Institution and the financial reporting standards practiced by Takaful industry to examine the hindrance towards the standardization process.
Findings
It is shown that the literature emphasis not only on the technical matters related to financial reporting standardization but also on the complex arrangement in different country settings. Learning from Indonesian experience, the literature suggests that neo-liberalism is piercing through different parts of economic and political setting of the country’s infrastructural powers leading up to the influence of financial reporting standardization process.
Originality/value
The paper contributes to the existing ontological arguments whether the Takaful industry is a mere business entity that has no specific requirements for financial reporting standards.
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The paper aims to build a greater understanding of countries transitioning from local generally accepted accounting principles (GAAP) to International Financial Reporting…
Abstract
Purpose
The paper aims to build a greater understanding of countries transitioning from local generally accepted accounting principles (GAAP) to International Financial Reporting Standards (IFRS). Second, the study assembles prior literature and examines the issues raised during the convergence. Finally, the paper recognises the implications of successful convergence practices that may be useful to other emerging markets and particular reference to India which is transitioning from local GAAP to IFRS-based principles.
Design/methodology/approach
The present study is a qualitative analysis that explores the Cost-benefit outcome carried by developed nations. The paper segregates the literature into three segments: developed nations, East Asian countries and the Brazil, Russia, India and China (BRIC) nations.
Findings
There are numerous issues and implications divulged from studies pertaining to the adoption of IFRS, i.e. corporate governance, fair value accounting and other environmental concerns. The paper further illustrates instances of dissimilarity of the Indian Accounting Standards to the IFRS.
Research limitations/implications
It is evident from the literature that limited studies have been carried out in the context of East Asian countries and BRIC nations in comparison to the developed nations. Further research should provide more comprehensive empirical evidence on the outcome of mandatory adoption of IFRS on firms in emerging countries.
Originality/value
The paradigm practice of mandatory adoption of IFRS by developed nations can be an insight for emerging countries that participate in the capital markets and for companies in compliance with the IFRS.
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Vincent Adela, Mac Junior Abeka, George Tackie, Comfort Ama Akorfa Anipa, Deborah Esi Gyanba Mbir and Cornelius Adorm-Takyi
The purpose of this paper is to investigate the effect of institutional structures on the strength of auditing and financial reporting standards.
Abstract
Purpose
The purpose of this paper is to investigate the effect of institutional structures on the strength of auditing and financial reporting standards.
Design/methodology/approach
This paper employs a panel data of 36 African countries over the period 2000–2018. System generalised method of moments (SGMM) was employed to estimate the relationship between institutional structures and the strength of auditing and financial reporting standards in Africa.
Findings
The findings of this paper indicate a positive and statistically significant relationship between institutional structures and the strength of auditing and financial reporting standards. As a further analysis, the study finds that the relationship between institutional structures and the strength of auditing and financial reporting standards is stronger for economies with common-law accounting traditions than those with civil-law origin.
Practical implications
The paper has important implications for countries striving to adopt and implement auditing and financial reporting standards fully. Such efforts must begin with establishing strong institutional structures in those countries.
Originality/value
This study presents the first empirical panel data evidence on the effect of institutional structures on the strength of auditing and financial reporting standards in Africa. Further, the methodology employed in this study can be regarded as effective in testing the phenomenon in other regions, or it can be employed as a guiding model for future research in the area.
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Eloy Gil-Cordero, Belén Maldonado-López, Pablo Ledesma-Chaves and Ana García-Guzmán
The purpose of the research is to analyze the factors that determine the intention of small- and medium-sized enterprises (SMEs) to adopt the Metaverse. For this purpose, the…
Abstract
Purpose
The purpose of the research is to analyze the factors that determine the intention of small- and medium-sized enterprises (SMEs) to adopt the Metaverse. For this purpose, the analysis of the effort expectancy and performance expectancy of the constructs in relation to business satisfaction is proposed.
Design/methodology/approach
The analysis was performed on a sample of 182 Spanish SMEs in the technology sector, using a PLS-SEM approach for development. For the confirmation of the model and its results, an analysis with PLSpredict was performed, obtaining a high predictive capacity of the model.
Findings
After the analysis of the model proposed in this research, it is recorded that the valuation of the effort to be made and the possible performance expected by the companies does not directly determine the intention to use immersive technology in their strategic behavior. Instead, the results obtained indicate that business satisfaction will involve obtaining information, reducing uncertainty and analyzing the competition necessary for approaching this new virtual environment.
Originality/value
The study represents one of the first approaches to the intention of business behavior in the development of performance strategies within Metaverse systems. So far, the literature has approached immersive systems from perspectives close to consumer behavior, but the study of strategic business behavior has been left aside due to the high degree of experimentalism of this field of study and its scientific approach. The present study aims to contribute to the knowledge of the factors involved in the intention to use the Metaverse by SMEs interested in this field.