In this study, we examine whether the mandatory adoption of IFRS by Turkish listed companies in 2005 was successful in practice and what role firm and country level factors played in the adoption. We determine the firm-specific factors that affect the degree of change in both measurement and disclosures by conducting a multivariate analysis. Further, we conduct interviews with external auditors to throw light on the challenges associated with adoption and the outcomes of adoption. We find that while the standards clearly impact certain accounts, adoption is not uniform across accounts. The overall measurement change is positively associated with auditor prominence and gearing, and negatively associated with the degree of free float. With regard to disclosures, we find that although there are some improvements, the vast majority of the disclosure items required by IFRS were not disclosed. Auditor type, size, and the degree of foreign ownership of shares exert a positive impact on the overall improvement in disclosures. Our interview analysis reveals that the dominance of tax laws, the lack of enforcement, corporate governance issues, and inadequate management information systems were all significant constraints to the successful adoption of IFRS.
Bibliographical noteNOTICE: this is the author’s version of a work that was accepted for publication in International Journal of Accounting. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Journal of Accounting vol 48, no. 3, (2013)] DOI: 10.1016/j.intacc.2013.07.002
© 2013, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/
- International Financial Reporting Standards
- Mandatory IFRS adoption
ASJC Scopus subject areas