Uyar, A., Kılıç, M., & Gökçen, B. A., (2016). Compliance with IAS/IFRS and firm characteristics: Evidence from the emerging capital market of Turkey. Economic research-Ekonomska istraživanja, 29(1), 148-161. doi.10.1080/1331677X.2016.1163949.
Globalization affects the accounting sector significantly, just like in all other fields. It is among the leading drivers for the harmonization of universal accounting practices. Harmonization is a technique of using a common language of business to facilitate global understanding. This reality is one of the main reasons for the emergence of International Financial Reporting Standards (IFRS). Uyar, Kilic, and Gokcen (2016) investigated the compliance level in Turkish companies coupled with the factors that influences the magnitude of adoption. This research was similar to that of Appiah et al. (2016), who assessed the same problem from a Ghanaian perspective. Notwithstanding, the former research is somewhat original as it investigates the level of IFRS compliance in Turkey. The authors used a comprehensive survey targeting the biggest Turkish industrial corporations, the ICI 500. The researchers realized that firm size, foreign ownership, training staff, and the listing status are primary determinants of IFRS compliance, while profitability and leverage are not (Uyar et al. 2016 148). This study will, thus, be a key reference point for the proposed research, which will focus on IFRS compliance in the United Kingdom.
Bassemir, M., (2018). Why do private firms adopt IFRS? Accounting and Business Research, 48(3), 237-263. doi. 10.1080/00014788.2017.1357459.
The level of IFRS compliance has a direct impact on the success of businesses across the globe. Mongrut and Winkelried (2019) fittingly observe that the adoption of the mentioned standards makes firms substitute high-quality audit practices with the newly imposed regulation to a level that creates an unintentional positive effect on transparency. Bassemir (2018) advanced the research by Uyar et al. (2016) by assessing whether or not private firms adopted the IFRS voluntarily. The former realized that the expected net benefits of adopting this standard vary exponentially between different private companies. Nonetheless, the establishments that implemented IFR were more successful than those that did not. Accordingly, Bassemir’s survey is expected to help the current study exponentially by building on the findings from the previous literature.
Proper auditing is among the leading promoters of success in businesses. Various firms have adopted different auditing process with multifaceted levels of success. This condition created a need to harmonize of the said activities to help realize universal success. Therefore, it is essential to empirically determine if at all the adoption of the IFRS achieves this goal. It is vital to assess the way a firm’s attributes affect the level of IFRS adoption assuming that this standard has an unprecedented effect on business success. Findings from this research are expected help in the development of ways to ensure better IFRS adoption.
- Does IFRS compliance promote business success?
- What is the impact of a firm’s size, leverage, listing status, training, profitability, and form of ownership on IFRS compliance?
The proposed study will involve two data collection methods, namely, an analysis of recent literature and an online questionnaire survey. The former will be used to help in the determination of the background for the study and the formulation of the hypotheses. On the contrary, the questionnaire survey will be used to collect actual current data and will target the U.K. firms listed in the Fortune 500 for 2018. The research will adopt the questionnaire developed by Uyar et al. (2016). The target companies will be conducted via emails.
The first set of data will pertain to whether or not the target companies consider the IFRS standards in their operations. The collected information will be on a YES/NO basis. The second set of data will address the correlation between IFRS compliance and the explanatory variables, namely, training, size, foreign ownership, and return on assets. Thus, the underlying information must address the current status of the target companies.
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References Appiah, K. O., Awunyo-Vitor, D., Mireku, K., & Ahiagbah, C. (2016). Compliance with international financial reporting standards: The case of listed firms in Ghana. Journal of Financial Reporting and Accounting, 14(1), 131-156. doi.10.1108/JFRA-01-2015-0003. Bassemir, M., (2018). Why do private firms adopt IFRS? Accounting and Business Research, 48(3), 237-263. doi.10.1080/00014788.2017.1357459. Mongrut, S., & Winkelried, D., (2019). Unintended effects of IFRS adoption on earnings management: The case of Latin America. Emerging Markets Review, 38, 377-388. doi. 10.1016/j.ememar.2018.11.004. Uyar, A., Kılıç, M., & Gökçen, B. A., (2016). Compliance with IAS/IFRS and firm characteristics: Evidence from the emerging capital market of Turkey. Economic research-Ekonomska istraživanja, 29(1), 148-161. doi.10.1080/1331677X.2016.1163949.