Explaining Accounting Policy Practices Under IFRS: The Role of Institutional Factors

• Type: Academic Work
• Date: 2016-11-15

Authors

Elena de las Heras (Author) Other; Moreira, José António C. (Author) FEP; Patrícia Teixeira Lopes (Author) FEP

Scientific classification

CORDIS: Social sciences > Economics > Management studies

Other information

Subject: WP disponível

Resumo (PT): Available at SSRN: https://ssrn.com/abstract=2869902 or http://dx.doi.org/10.2139/ssrn.2869902

Abstract (EN): We argue and document that persistent institutional factors determine managerial accounting policy practice under IFRS. In an analysis of accounting choice across thirteen European countries, we study both overt and covert choices, aggregating them to measure their impact over income, thereby focusing on firm overall accounting strategy and not only on individual choices. Our results indicate that institutional factors significantly explain the observed heterogeneity in accounting policy practices and that firm characteristics have a smaller role in explaining them. Capital market structure and tax-alignment are particularly important factor in driving accounting practice. Contrary to the recent emphasis on enforcement as a key institutional factor, our evidence indicates it is a second order factor, when controlling for other institutional factors. Keywords: Accounting policy practices, International differences, IFRS, institutional factors, managerial reporting incentives JEL Classification: M41, M44, M47

Language: English

Type (Professor's evaluation): Scientific