Factors Affecting the Quality of Financial Reporting after the Adoption of the New Greek Accounting Standards

D. Balios, I. Basiakos, N. Eriotis, P. Kotsilaras and El Thalassinos ()

International Journal of Finance, Insurance and Risk Management, 2021, vol. 11, issue 3, 3-26

Abstract: Purpose: The quality of financial reporting represents a major challenge for modern firms, as well as for all stakeholders. It is indicative that international standards are developed in order to ensure the relevance, comparability, understandability, faithful representation and timeliness of official financial statements. Under this framework, the present research investigates the factors which affect the quality of financial reporting and more precisely, firm size, audit firm size, geographical location, leverage, liquidity and profitability. Design/methodology/approach: The quantitative approach was selected and regression analyses were used to provide answers to the research questions. Quality was chosen as the dependent variable, measured using the results of a previous study. First, a regression model was developed in order to reveal correlations between the variables. Then, each independent variable was correlated with the dependent variable (quality) and different regression models were developed for each correlation. Findings: Firm size, audit firm size, geographical distribution, and more precisely the location of the headquarters are positively correlated with the quality of financial reporting. Profitability is negatively correlated with the quality of financial reporting, while leverage is not correlated with the quality of financial reporting. Besides, the quality of financial reporting depends on the interaction of all the variables and the initial model interprets this relationship in a satisfactory way. Originality/value: The originality of the present research lays in the fact that there are few researches which investigate the factors that affect the quality of financial reporting after the adoption of the New Greek Accounting Standards, while the use of the variable “geographical distribution” (distinction among the firms that are located in Attica and in the rest of the country) is novel in existing literature.

Keywords: Quality of financial reporting; leverage; profitability; liquidity; firm size; audit firm size. (search for similar items in EconPapers)
JEL-codes: M41 M42 (search for similar items in EconPapers)
Date: 2021
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ers:ijfirm:v:11:y:2021:i:3:p:3-26

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