Explaining the Determinants of International Financial Reporting Standard (IFRS) Disclosure: Evidence from Latin American Countries

Rosa Isabel González Muñoz (), Yeny Esperanza Rodríguez and Stella Maldonado
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Rosa Isabel González Muñoz: School of Management, Universidad de los Andes, Bogotá 111711, Colombia
Yeny Esperanza Rodríguez: School of Business, Universidad Francisco Marroquín, Guatemala City 01010, Guatemala
Stella Maldonado: School of Business and Economic Sciences, Universidad Icesi, Cali 760031, Colombia

JRFM, 2025, vol. 18, issue 10, 1-32

Abstract: This study investigates the firm- and country-level determinants that influence the extent of financial disclosure under International Financial Reporting Standards (IFRS) in selected Latin American Organisation for Economic Co-operation and Development (OECD) members or countries in the accession process in the period under analysis. Using a sample of 168 publicly listed companies from Argentina, Chile, Colombia, Mexico, and Peru, we construct a self-developed disclosure index based on compliance with International Accounting Standards IAS 16 (Property, Plant and Equipment) and IAS 2 (Inventories). These standards were selected due to their relevance across a broad range of sectors in emerging markets. Drawing on agency theory, stakeholder theory, institutional theory, signaling theory, and legitimacy theory, we examine how internal firm characteristics, macroeconomic performance, and institutional quality impact disclosure practices. Our empirical findings show that firm size, leverage, Gross Domestic Product (GDP) growth, and shareholder protection have a positive and statistically significant influence on the level of IFRS disclosure. However, not all institutional variables are equally effective, highlighting the complex interplay between regulatory environments and corporate reporting behavior in developing countries. The study contributes to the ongoing debate on the applicability and effectiveness of IFRS in emerging economies by offering evidence from underexplored Latin American markets and emphasizing the need for context-specific policy and regulatory interventions.

Keywords: financial reporting; disclosure; IFRS; OECD; Latin America (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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