Title: Fair value hierarchy in financial instruments disclosure - do audit committee and internal audit matter?
Authors: Lakshi Devi Boolaky Doorgakunt
Addresses: School of Accounting, Finance and Economics, Griffith University, Nathan Campus, 170 Kessels Road, Brisbane, Queensland 4111, Australia
Abstract: This paper investigates the influence of audit committee (AC) and internal audit (IA) on fair value hierarchy (FVH) in financial instruments disclosure under the amendments made in March 2009 to IFRS 7 in Mauritius. Specific data on FVH was collected from the annual reports of the top 30 listed companies for the period 2010-2013. A disclosure index was then constructed, and the impact of AC and IA is investigated. Banks and insurance companies still need to improve the disclosure of FVH (particularly level 3 hierarchies) by 20%-25%. The existence of AC and the competence of its member(s) are statistically significant whereas its independence is moderately significant. The presence of IA function is positive but moderately significant whereas independence and competence are positively related but insignificant. This paper informs regulator(s), practicing accountants/auditors and professional associations on the effective influence of AC and IA on disclosure practices of FVH in financial instruments.
Keywords: amended IFRS 7; disclosure; fair value hierarchy; Mauritius; audit committee; internal audit.
International Journal of Corporate Governance, 2019 Vol.10 No.2, pp.113 - 133
Received: 09 Mar 2018
Accepted: 08 Jan 2019
Published online: 11 Aug 2019 *