Open AccessThe role of enterprise risk management on disclosure transparency in the international financial reporting standards period
Author(s) -
Bisan Almasri
Publication year - 2021
Publication title -
accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.175
H-Index - 5
eISSN - 2369-7407
pISSN - 2369-7393
DOI - 10.5267/j.ac.2021.4.016
Subject(s) - incentive , business , accounting , international financial reporting standards , transparency (behavior) , capital market , enterprise value , finance , enterprise risk management , risk management , economics , political science , law , microeconomics
This research empirically investigates the role of the enterprise risk management system implementation level in capturing firm managerial incentives. The system plays an important role in understanding the association between international financial reporting standards and the capital market. Listed firms in the Australian market were used for the period 2000-2010 for this purpose. The study results imply that implementing higher levels of ERM by Australian firms during the mandatory IFRS adoption period does not capture firm incentives in IFRS period. Consequently, these results suggest that the implementation of ERM by Australian firms does not reduce the contractual costs between investors and management, whilst adopting IFRS does. Future research may use other techniques and/or strategies other than ERM, to capture the firm incentives, and as a result, may have economic consequences.