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Impact of IFRS adoption and corporate governance principles on transparency and disclosure: the case of Istanbul stock exchange

Aksu, Mine Hatice and Espahbodi, Hassan (2012) Impact of IFRS adoption and corporate governance principles on transparency and disclosure: the case of Istanbul stock exchange. (Submitted)

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Abstract

The beneficial consequences of reduction in asymmetric information through disclosure and the performance effects of International Financial Reporting Standards (IFRS) are well-established. However, whether disclosure quality indeed increases due to mandatory and voluntary regulation/best practices , such as the adoption of IFRS and Corporate Governance Principles is still an emprical question that hasn’t been directly tested. This paper tests this in an emerging market (EM where the infrastructure, dominant family ownership, and lax rules and implementation make it less likely for the disclosure quality effects to be observed. We show that Transparency & Disclosure (T&D) scores have improved during 2003-2005 in a sample of Istanbul Stock Exchange Index firmsand those who voluntarily adopted IFRS generally have significantly higher scores. However, the 2005 T&D scores for mandatory and voluntary adopters are not significantly different. Multivariate analysis shows that voluntary IFRS adoption, Corporate Governance (CG) principles, and mandatory IFRS adoption all increase financial disclosure and overall T&D scores. These findings should be of interest to researchers, policy makers, and regulators, especially in EMs that have recently started to adopt these best practices

Item Type:Article
Additional Information:This paper is now submitted to Emerging Markets Finance and Trade (an SSCI journal) and presented at the European Accounting Association (EAA) annual conference in Paris in May 2013 and in the Eurasia Economics and Business Society (EBES) annual conference in Istanbul, in June
Uncontrolled Keywords:corporate governance; transparency/disclosure index; IFRS; CG principles; voluntary adoption; mandatory adoption
Subjects:H Social Sciences > HG Finance > HG1706-1708 Accounting. Bookkeeping
ID Code:21284
Deposited By:Mine Hatice Aksu
Deposited On:10 Dec 2012 11:16
Last Modified:14 Dec 2014 13:26

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