The Impact of Corporate Governance on IFRS Adoption Choices

47 Pages Posted: 15 Sep 2008 Last revised: 7 Nov 2011

See all articles by Arnt Verriest

Arnt Verriest

EDHEC Business School

Ann Gaeremynck

KU Leuven

Daniel B. Thornton

Smith School of Business at Queen's University

Date Written: November 6, 2011

Abstract

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.

Keywords: International Financial Reporting Standards, Corporate Governance, Disclosure, Compliance

JEL Classification: G14, G15, G30, M38, K22, M41

Suggested Citation

Verriest, Arnt and Gaeremynck, Ann and Thornton, Daniel B., The Impact of Corporate Governance on IFRS Adoption Choices (November 6, 2011). Available at SSRN: https://ssrn.com/abstract=1266698 or http://dx.doi.org/10.2139/ssrn.1266698

Arnt Verriest (Contact Author)

EDHEC Business School ( email )

Av Gustave Delory 24
Roubaix, DC 59057
France

Ann Gaeremynck

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant B-3000
Belgium
3216326921 (Phone)

Daniel B. Thornton

Smith School of Business at Queen's University ( email )

143 Union Street, #358
Kingston, Ontario K7L 3N6
Canada
613-328-5213 (Phone)
613-533-2321 (Fax)

HOME PAGE: http://smith.queensu.ca

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