Effect of Mandatory Disclosure of IAS/IFRS on Earnings Management Among Listed Firms At The Uganda Securities Exchange
Loading...
Date
2019
Journal Title
Journal ISSN
Volume Title
Publisher
International Journal of Economics, Commerce and Management
Abstract
Prior research provides conflicting results on whether mandatory adoption IAS/IFRS deters or
contributes to greater earnings management. On this basis, this study sought to examine the
effect of mandatory disclosure of IAS/IFRS on earnings management among listed firms at the
Uganda Securities Exchange. First and in accordance with prior empirical disclosure research,
mandatory disclosure of IAS/IFRS is examined using a disclosure index. Secondly, earnings
management represented by the absolute value of discretionary accruals is measured using the
modified Jones model. Thirdly, robust regression is used to examine the effect of mandatory
disclosure of IAS/IFRS on earnings management for a census of 9 non-financial companies for
the period 2012 to 2017. We find an increase in earnings management following the 2005 mandatory adoption of IAS/IFRS among listed firms at the Uganda Securities Exchange. One
important implication of this study is that studying several IFRS enables the accounting standard
setters to identify standards that have a significant influence on financial reporting quality and
those that need to be revised as they offer the opportunity to manage earnings and allow
managers to opportunistically exercise the allowed reporting latitude. Secondly, the mandatory
disclosure index used in this study might act as a benchmark for regulators for purposes of
future analysis and evaluation. Despite the evidence documented in this study, the population of
listed non-financial firms used in this study is small. Consequently this limited the number of firm
year observations available over the six year period
Description
Keywords
Mandatory Disclosure, IAS/IFRS, Earnings Management, Uganda Securities Exchange
Citation
Etengu, R.O. Olweny, Tobias, O. Oluoch, J.O., (2019). Effect of Mandatory Disclosure of Ias/Ifrs on Earnings Management Among Listed Firms At The Uganda Securities Exchange. International Journal of Economics, Commerce and Management