Corporate governance and initial compliance with IFRS in emerging markets: the case of income tax accounting in Egypt

Ahmed Ebrahim, Tarek Mohamed Hassan Abdel Fattah

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    Abstract

    The paper examines the corporate governance factors and the independent audit quality as determinants of compliance with IFRS recognition and disclosure requirements of income tax accounting in Egypt. Using the initial IFRS adoption in Egypt, the results show evidence that corporate governance factors that indicate the sophistication level of both company’s management and owners (i.e., institutional ownership and foreign representation on the board) and the perceived quality of the engaged auditor improve compliance with IFRS requirements. Companies with higher levels of institutional ownership and foreign representation on the board are more likely to engage an audit firm with international affiliation and comply with IFRS recognition and disclosure requirements. The results underline the significance of professional development and regulations of local audit industries in emerging countries for actual compliance with IFRS requirements when they are officially adopted in these countries.
    Original languageEnglish
    Pages (from-to)46-60
    Number of pages15
    JournalJournal of International Accounting, Auditing and Taxation
    Volume24
    DOIs
    Publication statusEarly online - 6 Mar 2015

    Keywords

    • IFRS adoption
    • IFRS compliance
    • corporate governance
    • audit quality
    • emerging economy

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