Status已發表Published
The Impact of Regulatory Enforcement and Audit upon IFRS Compliance – Evidence from China
JEAN JINGHAN CHEN; HAITAO ZHANG
2010-01-15
Source PublicationEuropean Accounting Review
ABS Journal Level3
ISSN0963-8180
Volume19Issue:4Pages:665-692
Abstract

This study contributes to the accounting literature by providing empirical evidence from China that adopting IFRS does not necessarily lead to IFRS-type accounting practices. We examine the impact of regulatory enforcement, in particular,an important Chinese government compulsory compliance policy implemented in 2001,and audit upon the convergence of Chinese accounting practices. Using a sample of 103 Chinese B-share companies between 1999 and 2004, we reveal that the decline in earnings difference between firms’ financial statements under Chinese GAAP and IFRS is the result of the implementation of the 2001 policy and the audit committee which effectively control the firm’s application of standards rather than the differences between the standards. The effect of audit committee leads us further to argue that the convergence of accounting practices may be affected by not only the lack of insufficient understanding of IFRS by local accounting professionals, but also the management opportunistic behaviour during the application of different standards. It implies that corporate governance may affect the convergence of accounting practice. However, we do not find evidence for international audit firms outperforming their Chinese local CPAs with regard to IFRS compliance. Therefore, the Chinese government should be cautious in promoting the participation of international audit firms in China for achieving IFRS compliance.

DOIhttps://doi.org/10.1080/09638180903384684
Indexed BySSCI ; SSCI
WOS Research AreaBusiness & Economics
WOS SubjectBusiness, Finance
WOS IDWOS:000284413200002
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Citation statistics
Cited Times [WOS]:35   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionDEPARTMENT OF ACCOUNTING AND INFORMATION MANAGEMENT
Corresponding AuthorJEAN JINGHAN CHEN
AffiliationSchool of Management, University of Surrey, Guildford, UK
Recommended Citation
GB/T 7714
JEAN JINGHAN CHEN,HAITAO ZHANG. The Impact of Regulatory Enforcement and Audit upon IFRS Compliance – Evidence from China[J]. European Accounting Review,2010,19(4):665-692.
APA JEAN JINGHAN CHEN,&HAITAO ZHANG.(2010).The Impact of Regulatory Enforcement and Audit upon IFRS Compliance – Evidence from China.European Accounting Review,19(4),665-692.
MLA JEAN JINGHAN CHEN,et al."The Impact of Regulatory Enforcement and Audit upon IFRS Compliance – Evidence from China".European Accounting Review 19.4(2010):665-692.
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