The Influence of Country, Industry, and Topic Factors on IFRS Policy Choice
Abacus, 50(4), 2014, 386-421
54 Pages Posted: 10 Jul 2014 Last revised: 18 Dec 2014
This paper proposes a framework for understanding management’s decision-making on observable accounting policy choices. The framework is used to hypothesise how country, industry and topic factors influence policy choice under International Financial Reporting Standards (IFRS). The hypotheses are tested on the choices made by the largest firms from ten jurisdictions on a comprehensive set of IFRS policy topics, which are hand-collected from the financial statements. The results are consistent with the framework: country factors are particularly influential when the choice does not affect an important accounting number; and industry and topic factors influence the choice on some topics. Overall, we find that country factors have the greatest influence on IFRS policy choice.
Keywords: accounting choice, IFRS, international differences
JEL Classification: M41
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