On the Relation between Financial Reporting Quality and Country Attributes: Research Challenges and Opportunities

79 Pages Posted: 1 Aug 2019 Last revised: 30 Oct 2019

See all articles by Helena Isidro

Helena Isidro

ISCTE-IUL Instituto Universitario de Lisboa

Dhananjay Nanda

University of Miami - Department of Accounting

Peter D. Wysocki

Boston University Questrom School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: July 26, 2019

Abstract

We provide new evidence on the co-dependence among the many country attributes previously linked to financial reporting quality. First, we show that the synchronicity of 21 changing country attributes spikes surrounding mandatory IFRS adoption. Thus, while IFRS adoption “explains” increased reporting quality, this finding disappears after including other changing country determinants of reporting quality. Second, a single underlying factor distills the numerous reporting quality measures used in the international literature. Finally, we document that four underlying country factors largely subsume the individual explanatory power of 72 candidate country attributes in explaining reporting quality levels across countries. We conclude with implications and suggestions for future research on international reporting quality.

Keywords: Accounting quality, Co-dependence, Financial reporting, International accounting, IFRS adoption, Country attributes

JEL Classification: F30; G15; K22; M41

Suggested Citation

Isidro, Helena and Nanda, Dhananjay and Wysocki, Peter D., On the Relation between Financial Reporting Quality and Country Attributes: Research Challenges and Opportunities (July 26, 2019). Available at SSRN: https://ssrn.com/abstract=3427028 or http://dx.doi.org/10.2139/ssrn.3427028

Helena Isidro (Contact Author)

ISCTE-IUL Instituto Universitario de Lisboa

Av. das Forças Armadas
Lisboa, 1649-026
Portugal

Dhananjay Nanda

University of Miami - Department of Accounting ( email )

Coral Gables, FL 33146-6531
United States

Peter D. Wysocki

Boston University Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

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