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Effect of International Financial Reporting Standards on Firm Performance and Components of Leverage

Author

Listed:
  • Challoner A. Matero

    (Accountancy Department, University of San Carlos University, School of Business and Economics, Republic of the Philippines)

  • Hsien-Li Lee

    (Department of Accounting, Chung Yuan Christian University, College of Business, Republic of China)

Abstract

This study examines the effect of International Financial Reporting Standards on key firm performance in Taiwanese-listed firms using the sample period from 2012 to 2017. This study hypothesizes that the standards significantly affect firm performance. The outcomes of the study support the hypothesis that the standards are positively associated with the measures of profitability at a significant level. Secondly, the hypothesis on a negative effect of the standards on Price-Earnings Ratio and Debt-Equity Ratio. Thirdly, the hypotheses that the standards have a positive effect on Current Ratio and Equity Ratio have no support. The non-current component of leverage tends to hold a relationship with other variables in the same degree as the leverage does.

Suggested Citation

  • Challoner A. Matero & Hsien-Li Lee, 2024. "Effect of International Financial Reporting Standards on Firm Performance and Components of Leverage," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(1), pages 1206-1216, January.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:1:p:1206-1216
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    References listed on IDEAS

    as
    1. Wei‐Kang Wang & Wen‐Min Lu & Qian Long Kweh & Wun‐Ya Siao, 2020. "Related‐party transactions and corporate performance following the adoption of International Financial Reporting Standards in Taiwan," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(3), pages 371-379, April.
    2. Wafaa Salah & Abdallah Abdel-Salam, 2019. "The Effects of International Financial Reporting Standards on Financial Reporting Quality," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 5(3), pages 221-242, July.
    3. Roger D. Huang & Cheng‐Yi Shiu, 2009. "Local Effects of Foreign Ownership in an Emerging Financial Market: Evidence from Qualified Foreign Institutional Investors in Taiwan," Financial Management, Financial Management Association International, vol. 38(3), pages 567-602, September.
    4. Lueg, Rainer & Punda, Pawel & Burkert, Michael, 2014. "Does transition to IFRS substantially affect key financial ratios in shareholder-oriented common law regimes? Evidence from the UK," Advances in accounting, Elsevier, vol. 30(1), pages 241-250.
    5. Frederick Lindahl & Hannu Schadéwitz, 2013. "Are Legal Families Related to Financial Reporting Quality?," Abacus, Accounting Foundation, University of Sydney, vol. 49(2), pages 242-267, June.
    6. Anna‐Maija Lantto & Petri Sahlström, 2009. "Impact of International Financial Reporting Standard adoption on key financial ratios," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 49(2), pages 341-361, June.
    7. Liang, Deron & Lu, Chia-Chi & Tsai, Chih-Fong & Shih, Guan-An, 2016. "Financial ratios and corporate governance indicators in bankruptcy prediction: A comprehensive study," European Journal of Operational Research, Elsevier, vol. 252(2), pages 561-572.
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