Do IFRS and board of directors' independence affect accounting conservatism?

Tamer Elshandidy and Ahmed Hassanein

Applied Financial Economics, 2014, vol. 24, issue 16, 1091-1102

Abstract: This article observes separately and jointly the impact of international financial reporting standards (IFRS) and/or board of directors' independence on accounting conservatism in FTSE 100 nonfinancial firms between 2002 and 2007. Using Givoly and Hayn's (2000) accrual-based measure of accounting conservatism, we found a reduction in conservatism after the mandatory adoption of IFRS, and, also, that board of directors' independence improved accounting conservatism. Moreover, IFRS and board of directors' independence had a complementary impact on accounting conservatism since the role of independent directors was not observable prior to the mandatory adoption of IFRS. Our results suggest that, after the mandatory adoption of IFRS, independent directors are likely to put significantly more pressure on the management to practice more accounting conservatism.

Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://hdl.handle.net/10.1080/09603107.2014.924291 (text/html)
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:taf:apfiec:v:24:y:2014:i:16:p:1091-1102

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAFE20

DOI: 10.1080/09603107.2014.924291

Access Statistics for this article

Applied Financial Economics is currently edited by Anita Phillips

More articles in Applied Financial Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().