Company characteristics and compliance with IFRS's practice statement (management commentary) by listed companies in Bahrain
by Prem Lal Joshi; Ashutosh Deshmukh; Hemangini Deshmukh
International Journal of Managerial and Financial Accounting (IJMFA), Vol. 5, No. 4, 2013

Abstract: The purpose of this paper is to examine the factors influencing the voluntary compliance with the IFRS Practice Statement Management Commentary by listed companies in Bahrain in their 2010-2011 annual reports. The statistical analysis shows that there is a moderate tendency to comply with the practice statement. The compliance levels range from 40% to 97% with an average of 72.4%. The profitability, financial leverage, and industry types have positive and significant relationships with the disclosure in management commentary. But the board size affects the disclosures negatively. The compliance pattern suggests that most firms, on average, place greater emphasis on disclosures regarding the internal workings of the firm but less emphasis on the external factors and influences. Overall, the firms have complied with many aspects of the management commentary. We identify two areas - 'resources, risks and relationships' and 'performance measures and indicators' - where compliance can be improved.

Online publication date: Tue, 21-Oct-2014

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