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Mandatory environmental disclosures by companies complying with IAS/IFRS: The case of France, Germany and the UK

  • Elena Barbu

    ()

    (CERAG - Centre d'études et de recherches appliquées à la gestion - CNRS : UMR5820 - Université Pierre Mendès-France - Grenoble II)

  • Pascal Dumontier

    ()

    (CERAG - Centre d'études et de recherches appliquées à la gestion - CNRS : UMR5820 - Université Pierre Mendès-France - Grenoble II)

  • Niculae Feleagă

    (The Bucharest Academy of Economic Studies - The Bucharest Academy of Economic Studies)

  • Liliana Feleagă

    (The Bucharest Academy of Economic Studies - The Bucharest Academy of Economic Studies)

Registered author(s):

    This study investigates whether the adoption of a single set of accounting standards, such as IFRS, guarantees harmonization of accounting practices within a country and across countries, or whether differences in reporting practices persist because of dissimilarities in reporting habits and institutional settings. To this end, we investigate whether the level of environmental disclosure under IFRS is related to the size of the reporting firm, which has been shown to be a major determinant of voluntary environmental information, and the strength of legal and regulatory constraints on environmental disclosures in the country where the firm is domiciled. Results indicate that environmental disclosures imposed by IFRS increase with firm size, just like voluntary environmental disclosures. This suggests that application of IFRS is affected by the reporting practices that prevailed prior to IFRS adoption. Results also indicate that firms domiciled in countries with constraining environmental disclosure regulations (i.e. France and the UK) report more on environmental issues than do firms domiciled in countries with weakly constraining regulations (i.e. Germany). This suggests that national regulations strongly impact IFRS reporting. Taken as a whole, our results support the view that IFRS are not applied consistently across firms or across countries, notably because of persistence of reporting traditions and discrepancies in national legal requirements.

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    Paper provided by HAL in its series Post-Print with number halshs-00658734.

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    Date of creation: 2011
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    Handle: RePEc:hal:journl:halshs-00658734
    Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00658734/en/
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    1. Denis Cormier & Michel Magnan & Barbara Van Velthoven, 2005. "Environmental disclosure quality in large German companies: Economic incentives, public pressures or institutional conditions?," European Accounting Review, Taylor & Francis Journals, vol. 14(1), pages 3-39.
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    4. Cho, Charles H. & Patten, Dennis M., 2007. "The role of environmental disclosures as tools of legitimacy: A research note," Accounting, Organizations and Society, Elsevier, vol. 32(7-8), pages 639-647.
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    6. Khaled Elsayed, 2006. "Reexamining the Expected Effect of Available Resources and Firm Size on Firm Environmental Orientation: An Empirical Study of UK Firms," Journal of Business Ethics, Springer, vol. 65(3), pages 297-308, 05.
    7. Freedman, Martin & Jaggi, Bikki, 2005. "Global warming, commitment to the Kyoto protocol, and accounting disclosures by the largest global public firms from polluting industries," The International Journal of Accounting, Elsevier, vol. 40(3), pages 215-232.
    8. Rob Gray & Mohammed Javad & David M. Power & C. Donald Sinclair, 2001. "Social and Environmental Disclosure and Corporate Characteristics: A Research Note and Extension," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 28(3-4), pages 327-356.
    9. Cormier, Denis & Magnan, Michel, 2003. "Environmental reporting management: a continental European perspective," Journal of Accounting and Public Policy, Elsevier, vol. 22(1), pages 43-62.
    10. Baker, C. Richard & Barbu, Elena M., 2007. "Trends in research on international accounting harmonization," The International Journal of Accounting, Elsevier, vol. 42(3), pages 272-304.
    11. Carol Adams & Nongnooch Kuasirikun, 2000. "A comparative analysis of corporate reporting on ethical issues by UK and German chemical and pharmaceutical companies," European Accounting Review, Taylor & Francis Journals, vol. 9(1), pages 53-79.
    12. Ball, Ray & Robin, Ashok & Wu, Joanna Shuang, 2003. "Incentives versus standards: properties of accounting income in four East Asian countries," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 235-270, December.
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