The Impact of Corporate Governance on IFRS Adoption Choices

Verriest, Arnt; Gaeremynck, Ann; Thornton, Daniel B.

doi:10.2139/ssrn.1266698

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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

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: 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