The impact of corporate governance on IFRS adoption choices

A.J.M. Verriest, A. Gaeremynck, D.B. Thornton

Research output: Contribution to journalArticleScientificpeer-review

59 Citations (Scopus)

Abstract

We investigate the association between corporate governance strength and EU listed firms' choices with respect to International Financial Reporting Standards (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.
Original languageEnglish
Pages (from-to)39-77
JournalThe European Accounting Review
Volume22
Issue number1
Early online date24 Jan 2012
DOIs
Publication statusPublished - 2013

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