Impact of IFRS Application on Firm Performance Through Disclosure Quality

Nha Nguyen Minh (), Duong Nguyen Van and Hai Tran Thi Thanh
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Nha Nguyen Minh: University of Economics Ho Chi Minh City, School of Accounting
Duong Nguyen Van: University of Economics Ho Chi Minh City, School of Accounting
Hai Tran Thi Thanh: University of Economics Ho Chi Minh City, School of Accounting

A chapter in Proceedings of the International Conference on Emerging Challenges: Strategic Adaptation in the World of Uncertainties (ICECH 2022), 2023, pp 386-401 from Springer

Abstract: Abstract The paper examines the change of firm performance of listed companies by considering the influence of IFRS application. Furthermore, the mediating effect of disclosure quality is also considered in this study with Southeast Asian countries context. The application of IFRS has had a huge impact on the quality of financial reporting and thus increasing company performance. However, there has been a lack of studies integrating these factors into the same research model. The five-year dataset of companies listed on stock exchange of Southeast Asian countries during the period from 2017 to 2021 is used to investigate hypotheses. Additionally, we use the feasible general least squares estimation method to test the robustness of GMM estimation method results. The results exposed that there is positive and substantial influence of IFRS application on firm performance, which suitable for agency theory and economic theory of networks. Moreover, disclosure quality mediates the nexus between IFRS application and firm performance in Southeast Asian countries. According to the study’s outcomes, the higher the disclosure quality, the less information is omitted. That is, the information presented in the financial statements is disclosed more fully and carries more relevant value. This contributes to a higher financial firm performance. Therefore, companies need to improve the disclosure quality of financial statements by improving the level of omission of material items, especially by speeding up the application of IFRS in countries.

Keywords: Disclosure quality; Firm performance; IFRS application; Southeast Asian countries (search for similar items in EconPapers)
Date: 2023
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DOI: 10.2991/978-94-6463-150-0_26

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