Measuring compliance with IFRS mandatory disclosure requirements: some evidence from Malaysia

Abdullah, Mazni; Minhat, Marizah

Abstract

This study examines 225 Malaysian public listed firms’ compliance with IFRS mandatory disclosure requirements during 2008. Two unweighted methods of measuring compliance are used: the dichotomous method and the partial compliance method. The results show that the partial compliance method produces significantly lower aggregate compliance scores. Whilst the partial compliance
method will produce a more conservative estimate of the aggregate compliance scores, the dichotomous method will give more weight to standards with more disclosure items (e.g., FRS136). By implication, if the dichotomous method is used for regulatory purposes, firms that do not comply with standards with more disclosure items will be more disadvantaged than firms that do not comply with
standards with fewer disclosure items. Overall, this study demonstrates that the two methods produce significantly different compliance scores.

Citation

Abdullah, M., & Minhat, M. (2013). Measuring compliance with IFRS mandatory disclosure requirements: some evidence from Malaysia. Australian journal of basic and applied sciences / International network for scientific information ; INSInet, 7, 163-169

• Journal Article Type: Article
• Publication Date: 2013
• Deposit Date: Mar 23, 2016
• Print ISSN: 1991-8178
• Peer Reviewed: Peer Reviewed
• Volume: 7
• Pages: 163-169
• Keywords: Mandatory disclosure; methods; IFRS; Malaysia
• Public URL: http://researchrepository.napier.ac.uk/id/eprint/9745