The Impact of Corporate Governance on IFRS Adoption Choices
Daniel B. Thornton
November 6, 2011
We investigate the association between corporate governance strength and EU listed firms’ choices with respect to IFRS adoption in 2005. We measure governance strength by aggregating variables such as board independence, board functioning and audit committee effectiveness. The firms exhibit heterogeneity in both compliance and disclosure quality; some firms do not even meet the minimum disclosure requirements. Regression results show that stronger governance firms disclose more information, comply more fully and use IAS 39’s carve-out provision less opportunistically. These findings are germane to accountants, managers, and regulators in countries soon to adopt IFRS.
Number of Pages in PDF File: 47
Keywords: International Financial Reporting Standards, Corporate Governance, Disclosure, Compliance
JEL Classification: G14, G15, G30, M38, K22, M41working papers series
Date posted: September 15, 2008 ; Last revised: November 7, 2011
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