Authors: Kingsley Opoku Appiah; Simon Kofi Tetteh; Rabiatu Kamil
Addresses: School of Business, Kwame Nkrumah University of Science and Technology, KNUST Post Office, PMB, Kumasi, Ghana ' Ghana Audit Service, P.O. Box 163, Dunkwa-On-Offin, Ghana ' Department of Accounting Studies, Appiah-Menka University of Skills Training and Entrepreneurial Development, Kumasi, Ghana
Abstract: This study examines whether size and industry effect influence the nexus between auditor type and IAS 1 compliance in the developing economies context, while controlling for firm age, multiple listing, profitability, and financial leverage. Our analysis is based on ordinary least squares, random-effects, quantile regressions, 2SLS and hand collected data from the 2008 to 2014 annual reports of 31 listed firms on the Ghana Stock Exchange (GSE). We find 97% compliance level with IAS 1 disclosure requirement of GSE listed firms. The auditor type, measured by big 4 auditor, is significant and positively related to IAS 1 disclosure. This positive association is further strengthened by firm size and financial industry effect. The quantile regression analysis shows the interaction between auditor type and firm size is related to IAS 1 compliance, if a critical threshold of size is attained. Our results are robust in all estimations. The high IAS 1 compliance rate may indicate that preparers do not consider materiality in their disclosure choices. The study documents auditor type and IAS 1 compliance nexus is moderated by firm size, in an environment of lax enforcement regulations.
Keywords: disclosure; corporate reporting; accounting; International Accounting Standards; Ghana; financial reporting.
International Journal of Accounting and Finance, 2020 Vol.10 No.4, pp.190 - 211
Accepted: 15 Feb 2021
Published online: 08 Nov 2021 *