Compliance with IAS/IFRS and firm characteristics: evidence from the emerging capital market of Turkey

Figures & data

Table 1. Descriptive statistics (respondents).

	Frequency	Percentage
Education level
High school	1	1.1
Four-year faculty graduate	68	76.4
Master’s degree	19	21.3
PhD	1	1.1
Total	89	100.0
Year of experience
Less than 5	1	1.1
Between 5–10	12	13.5
Between 11–20	42	47.2
More than 20	34	38.2
Total	89	100.0
Position
Chief financial officer (CFO)	20	22.5
Accounting manager	40	45.0
Other (various positions related to accounting)	29	32.5
Total	89	100

Source: Authors’ calculation.

Table 2. Descriptive statistics (firms).

	Frequency	Percentage
Industry
Service	2	2.2
Manufacturing	82	92.1
Merchandising	5	5.6
Total	89	100.0
Number of employees
Less than 250	9	10.1
Between 250–500	17	19.1
Between 501–1 000	23	25.8
More than 1 000	40	44.9
Total	89	100.0
Sales revenues in 2010
Less than or equal to 250 000 000 TL	32	37.1
Between 250,000,001–500,000,000 TL	22	24.7
Between 500,000,001–1,000,000,000 TL	21	23.6
More than 1,000,000,000 TL	13	14.6
Total	89	100.0
Listing status
Listed	18	20.2
Non-listed	71	79.8
Total	89	100.0
Does your firm arrange IFRS training?
Yes	32	36.0
No	57	64.0
Total	89	100.0
Does your firm apply IFRS currently?
Yes	32	36.0
No	57	64.0
Total	89	100.0
How long does it take to complete adoption of IFRS?
It can be completed instantly
1 to 2 years	6	6.7
3 to 5 years	32	36.0
6 to 10 years	44	49.4
It can never be completed	7	7.9
Total	89	100.0

Source: Authors’ calculation.

Table 3. Adoption level of IAS/IFRS.

IAS/IFRS Adoption	Listed Firms		Non-listed Firms		Total
	No.	%	No.	%	No.	%
IFRS 1 First time adoption of international financial reporting standards	11	61.1%	19	26.8%	30	33.7%
IFRS 2 Share-based payment	2	11.1%	3	4.2%	5	5.6%
IFRS 3 Business combinations	5	27.8%	3	4.2%	8	9.0%
IFRS 4 Insurance contracts	0	0.0%	5	7.0%	5	5.6%
IFRS 5 Non-current assets held for sale and discontinued operations	9	50.0%	10	14.1%	19	21.3%
IFRS 6 Exploration for and evaluation of mineral resources	4	22.2%	3	4.2%	7	7.9%
IFRS 7 Financial instruments: disclosures	13	72.2%	9	12.7%	22	24.7%
IFRS 8 Operating segments	12	66.7%	7	9.9%	19	21.3%
IFRS 9 Financial instruments	13	72.2%	11	15.5%	24	27.0%
IAS 1 Presentation of financial statements	13	72.2%	16	22.5%	29	32.6%
IAS 2 Inventories	15	83.3%	19	26.8%	34	38.2%
IAS 7 Statement of cash flows	14	77.8%	18	25.4%	32	36.0%
IAS 8 Accounting policies, changes in accounting estimates and errors	13	72.2%	11	15.5%	24	27.0%
IAS 10 Events after the reporting period	15	83.3%	13	18.3%	28	31.5%
IAS 11 Construction contracts	0	0.0%	3	4.2%	3	3.4%
IAS 12 Income taxes	13	72.2%	14	19.7%	27	30.3%
IAS 16 Property, plant and equipment	15	83.3%	15	21.1%	30	33.7%
IAS 17 Leases	8	44.4%	7	9.9%	15	16.9%
IAS 18 Revenue	13	72.2%	17	23.9%	30	33.7%
IAS 19 Employee benefits	14	77.8%	14	19.7%	28	31.5%
IAS 20 Accounting for government grants and disclosure of government assistance	8	44.4%	6	8.5%	14	15.7%
IAS 21 The effects of changes in foreign exchange rates	14	77.8%	13	18.3%	27	30.3%
IAS 23 Borrowing costs	11	61.1%	13	18.3%	24	27.0%
IAS 24 Related party disclosures	14	77.8%	12	16.9%	26	29.2%
IAS 26 Accounting and reporting by retirement benefit plans	8	44.4%	5	7.0%	13	14.6%
IAS 27 Consolidated and separate financial statements	13	72.2%	13	18.3%	26	29.2%
IAS 28 Investment in associates	7	38.9%	7	9.9%	14	15.7%
IAS 29 Financial reporting in hyperinflationary economies	4	22.2%	6	8.5%	10	11.2%
IAS 31 Interests in joint ventures	0	0.0%	5	7.0%	5	5.6%
IAS 32 Financial instruments: presentation	12	66.7%	8	11.3%	20	22.5%
IAS 33 Earnings per share	14	77.8%	4	5.6%	18	20.2%
IAS 34 Interim financial reporting	14	77.8%	10	14.1%	24	27.0%
IAS 36 Impairment of assets	10	55.6%	10	14.1%	20	22.5%
IAS 37 Provisions, contingent liabilities and contingent assets	10	55.6%	11	15.5%	21	23.6%
IAS 38 Intangible assets	15	83.3%	16	22.5%	31	34.8%
IAS 39 Financial instruments: recognition and measurement	12	66.7%	9	12.7%	21	23.6%
IAS 40 Investment property	6	33.3%	6	8.5%	12	13.5%
IAS 41 Agriculture	1	5.6%	4	5.6%	5	5.6%

Source: Authors’ calculation.

Table 4. Pearson and Spearman’s rho correlation analyses.

	IFRSCOMP	LSTATUS	TRAINING	LEVERAGE	ROA	FOWNSHIP	SIZE
Panel A: Pearson
IFRSCOMP	1	0.529^**	0.264^*	0.061	-0.208	0.236	0.308^*
LSTATUS	0.529^**	1	0.147	-0.026	-0.210	0.022	0.261
TRAINING	0.264^*	0.147	1	0.265	-0.062	-0.001	0.005
LEVERAGE	0.061	-0.026	0.265	1	-0.503^**	0.058	-0.176
ROA	-0.208	-0.210	-0.062	-0.503^**	1	0.069	0.154
FOWNSHIP	0.236	0.022	-0.001	0.058	0.069	1	0.059
SIZE	0.308^*	0.261	0.005	−0.176	0.154	0.059	1
Panel B: Spearman’s rho
IFRSCOMP	1	0.518^**	0.275^**	0.081	-0.159	0.278^*	0.268
LSTATUS	0.518^**	1	0.147	-0.058	-0.116	0.075	0.289^*
TRAINING	0.275^**	0.147	1	0.269	-0.042	0.018	0.092
LEVERAGE	0.081	-0.058	0.269	1	-0.513^**	0.032	-0.138
ROA	-0.159	-0.116	-0.042	-0.513^**	1	0.047	0.185
FOWNSHIP	0.278^*	0.075	0.018	0.032	0.047	1	0.124
SIZE	0.268	0.289^*	0.092	-0.138	0.185	0.124	1

Source: Authors’ calculation.

^* Significant at 0.05 level;

^** Significant at 0.01 level; IFRSCOMP is IAS/IFRS compliance level as measured by the ratio of total number of standards complied with to total number of standards available; LSTATUS is dummy variable for listing status, coded as 1 for listed firms; 0 otherwise; TRAINING=is dummy variable for IAS/IFRS training, coded as 1 for firms which are trained; 0 otherwise; SIZE is the natural logarithm of total assets; LEVERAGE is the ratio of total liabilities to total assets; FOWNSHIP is foreign ownership percentage; ROA is return on assets.

Table 5. OLS regression results.

PANEL A	Coefficient	Std. Error	t-statistic	Sig.	VIF
(Constant)	-30.988	18.923	-1.638	0.110
LSTATUS	17.959	2.485	7.226	0.000	1.214
TRAINING	4.934	2.143	2.302	0.027	1.133
LEVERAGE	0.798	5.406	0.148	0.884	1.484
ROA	-10.612	14.670	-0.723	0.474	1.511
FOWNSHIP	0.068	0.040	1.691	0.099	1.074
SIZE	1.609	0.947	1.699	0.098	1.110
Adjusted R^2	68.7%
F value	16.370
Significance	0.000

Source: Authors’ calculation.

Notes: The dependent variable is IFRSCOMP (i.e. IAS/IFRS compliance level as measured by the ratio of total number of standards complied with to total number of standards available); LSTATUS is dummy variable for listing status, coded as 1 for listed firms; 0 otherwise; TRAINING=is dummy variable for IAS/IFRS training, coded as 1 for firms which are trained; 0 otherwise; SIZE is the natural logarithm of total assets; LEVERAGE is the ratio of total liabilities to total assets; FOWNSHIP is foreign ownership percentage; ROA is return on assets.