Business Group Membership and IFRS Reporting: The Effect of Group Financing and Investment Incentives

Kalogirou, Fani and André, Paul Business Group Membership and IFRS Reporting: The Effect of Group Financing and Investment Incentives. UNSPECIFIED.

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Abstract

Many unlisted firms are part of large conglomerate groups. For these firms, decisions about reporting practices are expected to be made at the group level (Beuselinck et al. 2014). Consistent with this hypothesis, our results indicate that group membership increases the likelihood of IFRS adoption by UK unlisted firms. Further, the identity and incentives of the parent firm are important determinants of the adoption decision. More specifically, our results suggest that subsidiaries adopt IFRS as part of their group’s strategy to improve the monitoring and optimise the financing and investing activities across the group, as portrayed by a subsequent increase in the investment efficiency at the subsidiary level and an increase in the probability of future debt issuance at the group level.

Item Type: Other Working Paper
Keywords: financial reporting, IFRS, business groups, unlisted firms, investment efficiency, accounting
Subject(s): Accounting
Date Deposited: 03 Oct 2018 13:29
Last Modified: 03 Oct 2018 13:29
Funders: N/A
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6954

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