Impact of International Financial Reporting Standard for small and medium-sized enterprises on corporate governance

Nesrine Sassi and Salma Damak-Ayadi

International Journal of Corporate Governance, 2021, vol. 12, issue 2, 124-156

Abstract: This research aimed to examine the relationship between the mandatory adoption of the International Financial Reporting Standard for small and medium-sized entities (IFRS for SMEs) and corporate governance by developing a corporate governance index (CGI). The empirical analysis was based on a multivariate regression investigating SMEs in two countries that adopt the IFRS for SMEs, namely the Dominican Republic and El Salvador. Our findings show that the mandatory adoption of IFRS for SMEs has a positive and significant effect only on the CGI of Salvadoran SMEs. Our results contribute to providing standard setters and SME managers with a better understanding of the effect of the mandatory IFRS for SMEs application on the quality of governance. This study is among the first to build an index that measures the corporate governance quality in the context of SMEs and to analyse the association between the mandatory adoption of IFRS for SMEs and corporate governance in SMEs.

Keywords: IFRS for SMEs; corporate governance index; CGI; SMEs; mandatory adoption; Dominican Republic; El Salvador. (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijcgov:v:12:y:2021:i:2:p:124-156

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