AN EXAMINATION OF THE IMPACT OF CULTURE ON IFRS RISK DISCLOSURES FOR FIRMS THAT CROSS- LIST IN THE U.S

Carmen B. Ríos-Figueroa

Accounting & Taxation, 2016, vol. 8, issue 1, 59-67

Abstract: Accounting disclosures is an important factor in the decision making process of users of financial statements. Differences in cultural values across countries may result in different opinions regarding the adequacy or extent of the disclosures on the financial statements. The objective of this study is to examine the effect of culture on IFRS 7 risk disclosures in firms that cross-list in the United States. This paper extends the current literature in the area of culture and IFRS risk disclosure requirements. The study sample consists of 62 international firms that trade in the New York Stock Exchange. A cross country analysis related to IFRS 7 disclosure level of financial risk was prepared for each firm. Using Hofstede (1983) and Gray’s theory (1988), each company and country was divided by cultural area and by a level of secrecy and conservatism scale. A level of risk disclosures was created for each company after considering the extension of the IFRS 7 disclosures in their annual reports. The results suggest that culture (secrecy and conservatism) do not have a significant impact in IFRS 7 disclosure levels. However, other economic and political factors seem to influence risk disclosures in financial statements

Keywords: Culture; IFRS 7; Risk Disclosures; Secrecy; Conservatism (search for similar items in EconPapers)
JEL-codes: F2 M16 M40 M41 (search for similar items in EconPapers)
Date: 2016
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