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Do globalisation and adoption of IFRS by banks in Africa lead to less earnings management?

Author

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  • Mohammed Amidu
  • Haruna Issahaku

Abstract

Purpose - This paper aims to analyse the implications of globalisation and the adoption of international standards (International Financial Reporting Standards [IFRS]) for accounting information quality. Design/methodology/approach - This paper uses a sample of 329 banks across 29 countries leading up to and beyond the implementation of IFRS to test for related hypotheses. Findings - First, banks’ financial statements are prepared on the basis of international standards as national economies are integrated when social norms are diffused. Building on these results, the second test suggests that the relatively high-quality earnings among banks in Africa during the period is attributable to the adoption of and interaction of IFRS with globalisation and the strategy of banks to diversify within and across interest and non-interest income. Originality/value - The authors investigate how globalisation and the adoption of IFRS affect accounting information quality.

Suggested Citation

  • Mohammed Amidu & Haruna Issahaku, 2019. "Do globalisation and adoption of IFRS by banks in Africa lead to less earnings management?," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 17(2), pages 222-248, June.
    • Handle: RePEc:eme:jfrapp:jfra-05-2017-0035
    DOI: 10.1108/JFRA-05-2017-0035
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    Citations

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    Cited by:

    1. Katarina Valaskova & Peter Adamko & Katarina Frajtova Michalikova & Jaroslav Macek, 2021. "Quo Vadis, earnings management? Analysis of manipulation determinants in Central European environment," Oeconomia Copernicana, Institute of Economic Research, vol. 12(3), pages 631-669, September.
    2. Weiqi Zhang & Huong Ha & Hui Ting Evelyn Gay, 2020. "Analysts’ forecasts between last consensus and earning announcement date," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 18(4), pages 779-793, November.
    3. Yosra Mnif & Imen Slimi, 2023. "Former auditors on the audit committee and earnings management: Evidence from African banks," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(2), pages 2383-2420, June.
    4. Ozili, Peterson Kitakogelu, 2021. "Big 4 auditors, bank earnings management and financial crisis in Africa," MPRA Paper 108608, University Library of Munich, Germany.

    More about this item

    Keywords

    IFRS; Globalization; Earnings management; African banking systems; F64; G21; M14; N27;
    All these keywords.

    JEL classification:

    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • N27 - Economic History - - Financial Markets and Institutions - - - Africa; Oceania

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