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Compliance with International Financial Reporting Standards and auditor choice: New evidence on the importance of the statutory audit

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Listed:
  • Hodgdon, Christopher
  • Tondkar, Rasoul H.
  • Adhikari, Ajay
  • Harless, David W.

Abstract

We examine the impact of auditor choice on IFRS compliance under the assumption of strict exogeneity of auditor choice. Our results reveal that compliance is positively related to auditor choice after controlling for firm size, profitability, leverage, degree of international diversification, and whether a firm has a U.S. listing or was audited according to International Standards of Auditing. We also find that auditor choice is positively related to firm compliance when controlling for unmeasured, firm-specific effects. The results of our study reinforce the importance of developing institutional mechanisms (e.g., enforcement, auditing, or corporate governance structures) to encourage compliance with IFRS.

Suggested Citation

  • Hodgdon, Christopher & Tondkar, Rasoul H. & Adhikari, Ajay & Harless, David W., 2009. "Compliance with International Financial Reporting Standards and auditor choice: New evidence on the importance of the statutory audit," The International Journal of Accounting, Elsevier, vol. 44(1), pages 33-55, March.
  • Handle: RePEc:eee:accoun:v:44:y:2009:i:1:p:33-55
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    References listed on IDEAS

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    1. repec:eee:jiaata:v:24:y:2015:i:c:p:46-60 is not listed on IDEAS
    2. Atanasko Atanasovski, 2013. "Determinants Of Financial Reporting Quality For Listed Entities In Macedonia: Evidence From Fair Value Accounting," Journal Articles, Center For Economic Analyses, pages 23-36, December.
    3. repec:spr:annopr:v:251:y:2017:i:1:d:10.1007_s10479-015-1969-3 is not listed on IDEAS
    4. Elzahar, Hany & Hussainey, Khaled & Mazzi, Francesco & Tsalavoutas, Ioannis, 2015. "Economic consequences of key performance indicators' disclosure quality," International Review of Financial Analysis, Elsevier, vol. 39(C), pages 96-112.
    5. Vieru, Markku & Schadewitz, Hannu, 2010. "Impact of IFRS transition on audit and non-audit fees: evidence from small and medium-sized listed companies in Finland," MPRA Paper 44664, University Library of Munich, Germany.
    6. repec:eee:jiaata:v:26:y:2016:i:c:p:28-46 is not listed on IDEAS
    7. repec:eee:advacc:v:29:y:2013:i:1:p:108-123 is not listed on IDEAS
    8. Hooghiemstra, Reggy, 2010. "Letters to the shareholders: A content analysis comparison of letters written by CEOs in the United States and Japan," The International Journal of Accounting, Elsevier, vol. 45(3), pages 275-300, September.
    9. repec:eee:mulfin:v:41:y:2017:i:c:p:23-46 is not listed on IDEAS
    10. katia Corsi & Daniela Mancini, 2015. "Regulatory compliance of financial control systems and its implications for accountants. Some evidence from Italian experience," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2015(3), pages 65-91.
    11. Rute Gonçalves & Patrícia Lopes, 2014. "Accounting in Agriculture: Disclosure practices of listed firms," FEP Working Papers 530, Universidade do Porto, Faculdade de Economia do Porto.
    12. repec:dug:actaec:y:2016:i:5:p:82-95 is not listed on IDEAS

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