Auditor type and IAS 1 compliance nexus: do size and industry effects matter?
by Kingsley Opoku Appiah; Simon Kofi Tetteh; Rabiatu Kamil
International Journal of Accounting and Finance (IJAF), Vol. 10, No. 4, 2020

Abstract: This study examines whether size and industry effect influence the nexus between auditor type and IAS 1 compliance in the developing economies context, while controlling for firm age, multiple listing, profitability, and financial leverage. Our analysis is based on ordinary least squares, random-effects, quantile regressions, 2SLS and hand collected data from the 2008 to 2014 annual reports of 31 listed firms on the Ghana Stock Exchange (GSE). We find 97% compliance level with IAS 1 disclosure requirement of GSE listed firms. The auditor type, measured by big 4 auditor, is significant and positively related to IAS 1 disclosure. This positive association is further strengthened by firm size and financial industry effect. The quantile regression analysis shows the interaction between auditor type and firm size is related to IAS 1 compliance, if a critical threshold of size is attained. Our results are robust in all estimations. The high IAS 1 compliance rate may indicate that preparers do not consider materiality in their disclosure choices. The study documents auditor type and IAS 1 compliance nexus is moderated by firm size, in an environment of lax enforcement regulations.

Online publication date: Mon, 08-Nov-2021

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Accounting and Finance (IJAF):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com