Open AccessDifferences between National Reporting Practices and IFRS for SMEs Presentation and Disclosure Requirements: Evidence from Italy
Author(s) -
Diego Valentinetti,
Michele A. Rea,
Basile Caterina
Publication year - 2016
Publication title -
international journal of accounting and financial reporting
Language(s) - English
Resource type - Journals
ISSN - 2162-3082
DOI - 10.5296/ijafr.v6i2.9838
Subject(s) - accounting , leverage (statistics) , business , profitability index , international financial reporting standards , presentation (obstetrics) , checklist , exploratory research , sample (material) , voluntary disclosure , finance , psychology , medicine , chemistry , chromatography , machine learning , sociology , computer science , anthropology , cognitive psychology , radiology
The aim of this paper is to assess the differences between the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) requirements and national financial reporting practices. For this purpose, the IASB’s checklist was applied to a sample of financial statements prepared in Italy by non-listed manufacturing companies. The results reveal the major differences existing in the presentation of financial statements, as well as in narrative disclosure practices in management commentary and notes. Furthermore, econometric analysis suggests that the differences are influenced by certain exploratory factors, namely, profitability, leverage, size and parent company relationship. This study offers new insights into the roles of certain exploratory factors that are likely to influence the movement towards the application of the IFRS for SMEs.