Title: An analysis of the firms-specific determinants influencing the voluntary IFRS adoption: evidence from Italian private firms

Authors: Sonja Pichler; Michela Cordazzo; Paola Rossi

Addresses: Marseiler Srl – Accounting Division, Via di Mezzo ai Piani 14/B, 39100 Bolzano, Italy ' Department of Management, Ca' Foscari University of Venice, San Giobbe Cannaregio 873, 30121 Venice, Italy ' Department of Economics and Management, University of Trento, Via Inama 5, 38122 Trento, Italy

Abstract: The EU regulation 1606/2002 enhances the financial statement comparability by requiring the IFRS mandatory application. In Italy, the implementation of EU regulation states that listed firms are required to prepare their financial statements in accordance with IFRS, then extended to private firms on a voluntary basis. The study aims to examine the influence of some firm-specific characteristics on voluntary IFRS adoption by analysing a selected sample of Italian private firms over 2006-2010. The results show that firms are more likely to adopt IFRS in their separate financial statements if there is the presence of ownership diffusion and a Big-4 along with greater profitability. Such adoption is not influenced by whether firms register a high level of capital intensity and leverage, and it does not increase with the firm size or level of foreign sales. Our findings may also represent a primary approach to investigate whether IFRS adoption could be beneficial for SMEs, as a large part of sampled firms may be classified according to the EU definition of SME.

Keywords: voluntary IFRS adoption; firm-specific determinants; accounting choices; private firms; Italy.

DOI: 10.1504/IJAAPE.2018.089418

International Journal of Accounting, Auditing and Performance Evaluation, 2018 Vol.14 No.1, pp.85 - 104

Received: 19 Aug 2016
Accepted: 28 Apr 2017

Published online: 17 Jan 2018 *

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