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The Influence of Country, Industry, and Topic Factors on IFRS Policy Choice
Author(s) -
Stadler Christian,
Nobes Christopher W.
Publication year - 2014
Publication title -
abacus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.632
H-Index - 45
eISSN - 1467-6281
pISSN - 0001-3072
DOI - 10.1111/abac.12035
Subject(s) - accounting , business , set (abstract data type) , affect (linguistics) , international financial reporting standards , choice set , economics , marketing , econometrics , computer science , programming language , linguistics , philosophy
This paper proposes a framework for understanding management's decision‐making on observable accounting policy choices. The framework is used to hypothesize how country, industry, and topic factors influence policy choice under I nternational F inancial R eporting S tandards ( IFRS ). The hypotheses are tested on the choices made by the largest firms from 10 jurisdictions on a comprehensive set of IFRS policy topics, which are hand‐collected from the financial statements. The results are consistent with the framework: country factors are particularly influential when the choice does not affect an important accounting number; and industry and topic factors influence the choice on some topics. Overall, we find that country factors have the greatest influence on IFRS policy choice.