The effect of corruption and culture on mandatory disclosure compliance levels: goodwill reporting in Europe

Mazzi, F.; Slack, R.; Tsalavoutas, I.

Abstract

While responding to calls for research and regulatory concerns regarding the influence of country level characteristics on the completeness and quality of financial statements, we examine the simultaneous influences of corruption and culture on levels of compliance with mandatory disclosure requirements. We use a panel dataset of European companies, for 2008–2011, and measure compliance with IFRS goodwill disclosure requirements utilising a disclosure index. Corruption is measured using the Corruption Perception Index (CPI) and Schwartz (2008) bipolar cultural dimensions are used as measures of culture. We find that compliance levels vary significantly across sample firms, countries and over time. The level of corruption and two of the three cultural dimensions (Hierarchy and Mastery) are significantly related to these levels of compliance. These findings also hold for the changes in compliance levels over time. On that basis, the paper makes original contributions to our understanding of determinants of compliance levels with IFRS mandatory disclosure requirements.

Citation

Mazzi, F., Slack, R., & Tsalavoutas, I. (2018). The effect of corruption and culture on mandatory disclosure compliance levels: goodwill reporting in Europe. Journal of International Accounting, Auditing and Taxation, 31, 52-73. https://doi.org/10.1016/j.intaccaudtax.2018.06.001

• Journal Article Type: Article
• Acceptance Date: Sep 15, 2017
• Online Publication Date: Jun 15, 2018
• Publication Date: Jun 15, 2018
• Deposit Date: Sep 18, 2017
• Publicly Available Date: Jun 15, 2020
• Journal: Journal of International Accounting, Auditing and Taxation
• Print ISSN: 1061-9518
• Electronic ISSN: 1879-1603
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 31
• Pages: 52-73
• DOI: https://doi.org/10.1016/j.intaccaudtax.2018.06.001
• Public URL: https://durham-repository.worktribe.com/output/1349039