Compliance level with IFRS disclosure requirements across 12 African countries: do enforcement mechanisms matter?

Hela Borgi and Yosra Mnif

Journal of Financial Regulation and Compliance, 2021, vol. 30, issue 1, 60-81

Abstract: Purpose - The purpose of this study is to investigate the effect of enforcement, and more particularly government quality and the stock market development, on compliance with International Financial Reporting Standards (IFRS) disclosure requirements in 12 African countries. Design/methodology/approach - The authors use a self-constructed compliance index from content analysis and apply panel regressions for a sample of 606 firm-year observations during the period 2012 to 2014. Findings - This analysis illustrates a high level of disparity of information provided by companies, possibly due to the complexity of the selected standards and the depth of information required. The findings reveal that government quality and stock market development have a positive and significant effect on compliance with IFRS disclosure requirements in Africa. This implies that enforcement plays a key role in improving the compliance level across African countries. Practical implications - These findings should be of interest to government policymakers, professional bodies, regulators and standard setters who are concerned with compliance and financial reporting transparency at a country level. It should be a signal to call for more effort to strengthen the enforcement of accounting standards and capital market supervision by putting in place some disciplinary actions for non-compliance with IFRS. The authors also believe that the results may help African policymakers and regulators enhance the level of compliance with IFRS disclosure requirements by enforcing accounting standards. Originality/value - This research contributes to the compliance literature by investigating the effect of enforcement on compliance with IFRS disclosure requirements in the African countries, an understudied context where enforcement is a challenge.

Keywords: Financial reporting; Disclosure; IFRS; Compliance; Government (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jfrcpp:jfrc-09-2020-0094

DOI: 10.1108/JFRC-09-2020-0094

Access Statistics for this article

Journal of Financial Regulation and Compliance is currently edited by Prof John Ashton

More articles in Journal of Financial Regulation and Compliance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().