Pakistan Journal of Social Sciences
ISSN: Online 1993-6052ISSN: Print 1683-8831
Abstract
This research examines the characteristics of firms from the European Union claiming to comply with International Accounting Standards (IAS). These standards are broadly used in Pakistan, where they are binding for listed companies even though other companies are encouraged to follow them also. The European Commission`s strategy with regard to accounting harmonisation has been recently redefined along the same lines, i.e. EU listed companies will be required to present their consolidated accounts in accordance with IAS, from 2005 at the latest. However, EU Member Countries will be allowed to extend this requirement or the option to use IAS to non-listed companies. With a view to shed some light in this setting, our empirical analysis provides evidence on why companies are inclined to comply with IAS on a voluntary basis. Out from the seven hypothesis introduced, only two determinants of IAS compliance (size and level of foreign activity) were found to be significant in all the tests carried out. Results are discussed and recommendations for the standard-setting debate are suggested.
How to cite this article:
Maria Antnia Garcia-Benau and Zorio Grima . Why Companies Comply on a Voluntary Basis with International Accounting Standards (IAS): European Evidence on Firm Characteristics.
DOI: https://doi.org/10.36478/pjssci.2003.160.172
URL: https://www.makhillpublications.co/view-article/1683-8831/pjssci.2003.160.172