IFRS adoption by UK unlisted firms: subsidiary- versus group-level incentives

Details

Serval ID
serval:BIB_FD20B5339795
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
IFRS adoption by UK unlisted firms: subsidiary- versus group-level incentives
Journal
Accounting Forum
Author(s)
André Paul, Kalogirou Fani
ISSN
0155-9982
1467-6303
Publication state
Published
Issued date
19/06/2019
Pages
1-23
Language
english
Abstract
We examine both subsidiary- and group-level determinants of IFRS adoption by unlisted UK firms. Many unlisted firms are part of large conglomerate groups. For these firms, decisions about reporting practices are expected to be made at the group-level. Consistent with this hypothesis, we find that subsidiaries adopt IFRS as part of their group’s strategy to improve within group monitoring and raise external debt capital. The probability of a subsidiary adopting IFRS increases further when the parent firm is applying IFRS itself, when the within group information asymmetry is greater, and when the subsidiary is less autonomous. ROC curve analysis indicates that these incentives are more important than traditional subsidiary-level incentives studied previously. In additional analyses, we find that adopting subsidiaries benefit from better accounting quality and higher investment efficiency.
Keywords
Accounting, Finance
Create date
01/07/2019 16:50
Last modification date
21/08/2019 5:16
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