Disclosure (Discernibility) and Compliance of Accounting Policies: Asia-Pacific Evidence

19 Pages Posted: 28 Nov 2002

See all articles by Ross Taplin

Ross Taplin

Murdoch University

Greg Tower

Murdoch University

Phil Hancock

University of Western Australia

Multiple version iconThere are 2 versions of this paper

Abstract

This project extends the work of Tower, Hancock and Taplin (1999) on the extent of compliance with International Accounting Standards (IAS) in six Asia Pacific countries. Sixty annual reports from companies in Australia, Hong Kong, Malaysia, Philippines, Singapore, and Thailand are analysed to create several compliance indices based on all universally applicable IAS rules at the time. The compliance ratio is computed as an aggregate value, split into measurement and disclosure categories. These ratios are also calculated on a standard-by-standard basis. Moreover, a new Discernibility Index is evolved to generate insights into patterns of non-disclosure.

The results show higher levels of compliance with disclosure issues (95.5%) than measurement issues (77.7%). The lowest overall compliance rates were found for IAS 7, IAS 22 and IAS 28. In terms of the Discernibilty Index, companies in the four Asian countries with British colonial links had lower levels of non-disclosure than Philippines or Thailand entities. The more profitable companies also tended to have a higher proportion of discernible (disclosures) items for measurement issues. The levels of non-disclosure have very distinctive standard-by-standard patterns.

The findings have important policy implications. The level of discernibility (disclosures) is low with strong country and topical trends exhibited. Therefore, harmonisation is difficult to measure and country/company variances suggest that the goal of regional comparability has not been achieved. There is a need for change in the status quo level of non-disclosure of Asia-Pacific companies. In line with public theories of regulation, a call for more direct government intervention is made.

JEL Classification: M41, M44, M45, M47

Suggested Citation

Taplin, Ross and Tower, Greg and Hancock, Phil, Disclosure (Discernibility) and Compliance of Accounting Policies: Asia-Pacific Evidence. Accounting Forum, Vol. 26, pp. 172-190, 2002, Available at SSRN: https://ssrn.com/abstract=318590

Ross Taplin

Murdoch University ( email )

Department of Mathematics and Statistics
South Street
Murdoch 6150, Western Australia
Australia

HOME PAGE: http://wwwmaths.murdoch.edu.au/staff/rtaplin.html

Greg Tower (Contact Author)

Murdoch University ( email )

School of Commerce
South Street
Murdoch 6150, Western Australia
Australia

Phil Hancock

University of Western Australia ( email )

Graduate School of Management
35 Stirling Highway
Crawley WA 6009
Australia
61 8 938029129 (Phone)
61 8 9380 1072 (Fax)

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