Do professional shareholders matter for corporate compliance with IFRS reporting requirements: the moderating effect of board independence

Mohammad A.A. Zaid

International Journal of Accounting & Information Management, 2023, vol. 31, issue 4, 647-675

Abstract: Purpose - From an agency theory realm, this study aims to respond to the more recent calls to deeply analyze the indirect influence of professional shareholders, namely, institutional, blockholder and foreign owners, on the extent of compliance with International Financial Reporting Standards (IFRS) mandatory reporting requirements. Design/methodology/approach - Multivariate regression analysis was applied. Moreover, quantitative static and dynamic panel data have been used. More plainly, ordinary least squares was run as a baseline estimator. Afterwards, one-step system generalized method of moment and two-stage least squares were conducted to control for the potential endogeneity dilemma. The analysis is based on a sample of nonfinancial listed firms on the Palestine Stock Exchange for the time span of 10 years, from 2010 to 2019. Findings - After controlling for the detrimental effect of the endogeneity issue, the findings clearly reveal that the effect of the three types of professional shareholders (institutional, blockholder and foreign) on the extent of compliance with IFRS is more significant under a high proportion of independent nonexecutive directors. Originality/value - To the best of the author’s knowledge, prior literature on the nexus between shareholding structure and compliance level with IFRS has restricted solely to analyzing the direct influence without casting the light on the moderation effect of independent nonexecutive directors. Hence, analyzing this sensitive configuration merits attention. In this vein, to ameliorate the compliance level with IFRS, regulators have to devote remarkable effort to updating both enforcement mechanisms and best practices of shareholding structure simultaneously.

Keywords: IFRS; Compliance level; Mandatory reporting; Ownership structure; Professional shareholders; Board independence (search for similar items in EconPapers)
Date: 2023
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:ijaimp:ijaim-02-2023-0025

DOI: 10.1108/IJAIM-02-2023-0025

Access Statistics for this article

International Journal of Accounting & Information Management is currently edited by Dr Xin (Robert) Luo and Professor Han Donker

More articles in International Journal of Accounting & Information Management from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().