Examining the Impact of International Financial Reporting Standards Adoption on Financial Reporting Quality of Multinational Companies
This research delves into the influence of adopting international financial reporting standards (IFRSs) on the financial reporting quality (FRQ) of Indian multinational corporations (MNCs). It also investigates the moderating impact of the internal control system (ICS) on the relationship between IF...
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MDPI AG
2024-09-01
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| Series: | International Journal of Financial Studies |
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| Online Access: | https://www.mdpi.com/2227-7072/12/4/96 |
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| author | Amar Johri |
| author_facet | Amar Johri |
| author_sort | Amar Johri |
| collection | DOAJ |
| description | This research delves into the influence of adopting international financial reporting standards (IFRSs) on the financial reporting quality (FRQ) of Indian multinational corporations (MNCs). It also investigates the moderating impact of the internal control system (ICS) on the relationship between IFRSs and FRQ. The data collection involves a survey using a previously validated and adjusted scale from earlier studies. A sample of 512 participants is selected through purposive sampling methods. The analysis employs partial least square structural equation modelling (PLS-SEM) to validate the data and test the hypotheses. The results indicate a significantly positive influence of perceived benefits, perceived ease of implementation, and government policy on IFRS adoption within Indian MNCs. However, the impact of legal requirements on IFRS adoption in Indian MNCs is insignificantly positive. Furthermore, adopting IFRSs substantially positively affects FRQ within Indian MNCs. Similarly, FRQ significantly positively affects the relevance, accuracy, understandability, comparability, and timeliness of MNCs’ financial reports in India. The moderating role of the ICS in the connections between IFRS adoption and FRQ is positive yet insignificant within Indian MNCs. The insights derived from this study are valuable for investors, shareholders, government authorities, financiers, board members, and top executives of organisations. |
| format | Article |
| id | doaj-art-ffcaf32b1a144f9c8bf12001bed044f9 |
| institution | Kabale University |
| issn | 2227-7072 |
| language | English |
| publishDate | 2024-09-01 |
| publisher | MDPI AG |
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| series | International Journal of Financial Studies |
| spelling | doaj-art-ffcaf32b1a144f9c8bf12001bed044f92024-12-27T14:29:56ZengMDPI AGInternational Journal of Financial Studies2227-70722024-09-011249610.3390/ijfs12040096Examining the Impact of International Financial Reporting Standards Adoption on Financial Reporting Quality of Multinational CompaniesAmar Johri0College of Administrative and Financial Sciences, Saudi Electronic University, Riyadh 11673, Saudi ArabiaThis research delves into the influence of adopting international financial reporting standards (IFRSs) on the financial reporting quality (FRQ) of Indian multinational corporations (MNCs). It also investigates the moderating impact of the internal control system (ICS) on the relationship between IFRSs and FRQ. The data collection involves a survey using a previously validated and adjusted scale from earlier studies. A sample of 512 participants is selected through purposive sampling methods. The analysis employs partial least square structural equation modelling (PLS-SEM) to validate the data and test the hypotheses. The results indicate a significantly positive influence of perceived benefits, perceived ease of implementation, and government policy on IFRS adoption within Indian MNCs. However, the impact of legal requirements on IFRS adoption in Indian MNCs is insignificantly positive. Furthermore, adopting IFRSs substantially positively affects FRQ within Indian MNCs. Similarly, FRQ significantly positively affects the relevance, accuracy, understandability, comparability, and timeliness of MNCs’ financial reports in India. The moderating role of the ICS in the connections between IFRS adoption and FRQ is positive yet insignificant within Indian MNCs. The insights derived from this study are valuable for investors, shareholders, government authorities, financiers, board members, and top executives of organisations.https://www.mdpi.com/2227-7072/12/4/96IFRS adoptionfinancial reporting qualityinternal control systemMNCsperceived ease of implementation |
| spellingShingle | Amar Johri Examining the Impact of International Financial Reporting Standards Adoption on Financial Reporting Quality of Multinational Companies International Journal of Financial Studies IFRS adoption financial reporting quality internal control system MNCs perceived ease of implementation |
| title | Examining the Impact of International Financial Reporting Standards Adoption on Financial Reporting Quality of Multinational Companies |
| title_full | Examining the Impact of International Financial Reporting Standards Adoption on Financial Reporting Quality of Multinational Companies |
| title_fullStr | Examining the Impact of International Financial Reporting Standards Adoption on Financial Reporting Quality of Multinational Companies |
| title_full_unstemmed | Examining the Impact of International Financial Reporting Standards Adoption on Financial Reporting Quality of Multinational Companies |
| title_short | Examining the Impact of International Financial Reporting Standards Adoption on Financial Reporting Quality of Multinational Companies |
| title_sort | examining the impact of international financial reporting standards adoption on financial reporting quality of multinational companies |
| topic | IFRS adoption financial reporting quality internal control system MNCs perceived ease of implementation |
| url | https://www.mdpi.com/2227-7072/12/4/96 |
| work_keys_str_mv | AT amarjohri examiningtheimpactofinternationalfinancialreportingstandardsadoptiononfinancialreportingqualityofmultinationalcompanies |