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Do IFRS and board of directors’ independence affect accounting conservatism?

Elshandidy, T and Hassanein, Ahmed 2014, 'Do IFRS and board of directors’ independence affect accounting conservatism?' , Applied Financial Economics, 24 (16) , pp. 1091-1102.

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Abstract

This article observes separately and jointly the impact of international financial reporting standards (IFRS) and/or board of directors’ independence on accounting conservatismin FTSE 100 nonfinancial firms between 2002 and 2007. Using Givoly and Hayn’s (2000) accrual-based measure of accounting conservatism, we found a reduction in conservatismafter themandatory adoption of IFRS, and, also, that board of directors’ independence improved accounting conservatism. Moreover, IFRS and board of directors’ independence had a complementary impact on accounting conservatism since the role of independent directors was not observable prior to the mandatory adoption of IFRS. Our results suggest that, after the mandatory adoption of IFRS, independent directors are likely to put significantly more pressure on the management to practice more accounting conservatism.

Item Type: Article
Schools: Schools > Salford Business School
Journal or Publication Title: Applied Financial Economics
Publisher: Taylor & Francis
ISSN: 0960-3107
Related URLs:
Funders: Ahmed Hassanein
Depositing User: Dr AHmed Hassanein
Date Deposited: 07 Mar 2016 11:34
Last Modified: 07 Mar 2016 11:34
URI: http://usir.salford.ac.uk/id/eprint/38051

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