Is early adoption really a choice? Evidence on IFRS from Taiwan

Yu-Lin HSU, Gavin Reid

Research output: Contribution to conferencePaper

Abstract

This paper uses a stated preference approach to determine whether Taiwanese listed firms chose to adopt IFRS early in 2012. It deploys a mixed methodology (Creswell & Plano Clark, 2011), using qualitative and quantitative analysis of semi-structured interview data, to investigate firms’ actions in practice and how they viewed the choice of IFRS (including their perceived adoption costs and benefits), Reid & Smith (2007b), Schipper (2010). Although we found wide variation in the perceived net benefits of implementing IFRS, in the event, none of the Taiwanese listed companies adopted IFRS early. To explore the reason behind this unusual situation, we examine why every company withdrew from early IFRS adoption – indeed, even at the last minute. We use a detailed case study approach. Our analysis shows this late withdrawal is due primarily to the frequent changes in regulations, and secondarily to the lack of preparation time for early adoption. We find that both financial reporting standards and the feasibility of execution are important to managers in making their decision. We conclude that: (a) policy makers should ensure feasibility of the timeline for introducing new regulations, as short-notice of changes would limit adoption; and (b) accounting authorities should avoid changing regulations too often, as this increases corporate risk, and thereby reduces incentives for early adoption. Our research also contributes to knowledge by calibrating accounting costs and benefits: showing clearly how they influence corporate choices.
LanguageEnglish
Number of pages35
Publication statusPublished - 9 Apr 2019
EventThe 2019 Annual Conference of the British Accounting and Finance Association -
Duration: 9 Apr 201910 Apr 2019

Conference

ConferenceThe 2019 Annual Conference of the British Accounting and Finance Association
Period9/04/1910/04/19

Fingerprint

International Financial Reporting Standards
Taiwan
Costs and benefits
IFRS adoption
Preparation
Structured interview
Managers
Quantitative analysis
Incentives
Listed companies
Stated preference
Qualitative analysis
Decision making
Financial reporting
Methodology
Politicians
Authority

Keywords

  • international financial reporting standards
  • IFRS
  • accounting standards
  • Taiwan

Cite this

HSU, Y-L., & Reid, G. (2019). Is early adoption really a choice? Evidence on IFRS from Taiwan. Paper presented at The 2019 Annual Conference of the British Accounting and Finance Association, .
HSU, Yu-Lin ; Reid, Gavin. / Is early adoption really a choice? Evidence on IFRS from Taiwan. Paper presented at The 2019 Annual Conference of the British Accounting and Finance Association, .35 p.
@conference{1e182e2a51334ef1a1c47ff0c6d34503,
title = "Is early adoption really a choice? Evidence on IFRS from Taiwan",
abstract = "This paper uses a stated preference approach to determine whether Taiwanese listed firms chose to adopt IFRS early in 2012. It deploys a mixed methodology (Creswell & Plano Clark, 2011), using qualitative and quantitative analysis of semi-structured interview data, to investigate firms’ actions in practice and how they viewed the choice of IFRS (including their perceived adoption costs and benefits), Reid & Smith (2007b), Schipper (2010). Although we found wide variation in the perceived net benefits of implementing IFRS, in the event, none of the Taiwanese listed companies adopted IFRS early. To explore the reason behind this unusual situation, we examine why every company withdrew from early IFRS adoption – indeed, even at the last minute. We use a detailed case study approach. Our analysis shows this late withdrawal is due primarily to the frequent changes in regulations, and secondarily to the lack of preparation time for early adoption. We find that both financial reporting standards and the feasibility of execution are important to managers in making their decision. We conclude that: (a) policy makers should ensure feasibility of the timeline for introducing new regulations, as short-notice of changes would limit adoption; and (b) accounting authorities should avoid changing regulations too often, as this increases corporate risk, and thereby reduces incentives for early adoption. Our research also contributes to knowledge by calibrating accounting costs and benefits: showing clearly how they influence corporate choices.",
keywords = "international financial reporting standards, IFRS, accounting standards, Taiwan",
author = "Yu-Lin HSU and Gavin Reid",
year = "2019",
month = "4",
day = "9",
language = "English",
note = "The 2019 Annual Conference of the British Accounting and Finance Association ; Conference date: 09-04-2019 Through 10-04-2019",

}

HSU, Y-L & Reid, G 2019, 'Is early adoption really a choice? Evidence on IFRS from Taiwan' Paper presented at The 2019 Annual Conference of the British Accounting and Finance Association, 9/04/19 - 10/04/19, .

Is early adoption really a choice? Evidence on IFRS from Taiwan. / HSU, Yu-Lin; Reid, Gavin.

2019. Paper presented at The 2019 Annual Conference of the British Accounting and Finance Association, .

Research output: Contribution to conferencePaper

TY - CONF

T1 - Is early adoption really a choice? Evidence on IFRS from Taiwan

AU - HSU, Yu-Lin

AU - Reid, Gavin

PY - 2019/4/9

Y1 - 2019/4/9

N2 - This paper uses a stated preference approach to determine whether Taiwanese listed firms chose to adopt IFRS early in 2012. It deploys a mixed methodology (Creswell & Plano Clark, 2011), using qualitative and quantitative analysis of semi-structured interview data, to investigate firms’ actions in practice and how they viewed the choice of IFRS (including their perceived adoption costs and benefits), Reid & Smith (2007b), Schipper (2010). Although we found wide variation in the perceived net benefits of implementing IFRS, in the event, none of the Taiwanese listed companies adopted IFRS early. To explore the reason behind this unusual situation, we examine why every company withdrew from early IFRS adoption – indeed, even at the last minute. We use a detailed case study approach. Our analysis shows this late withdrawal is due primarily to the frequent changes in regulations, and secondarily to the lack of preparation time for early adoption. We find that both financial reporting standards and the feasibility of execution are important to managers in making their decision. We conclude that: (a) policy makers should ensure feasibility of the timeline for introducing new regulations, as short-notice of changes would limit adoption; and (b) accounting authorities should avoid changing regulations too often, as this increases corporate risk, and thereby reduces incentives for early adoption. Our research also contributes to knowledge by calibrating accounting costs and benefits: showing clearly how they influence corporate choices.

AB - This paper uses a stated preference approach to determine whether Taiwanese listed firms chose to adopt IFRS early in 2012. It deploys a mixed methodology (Creswell & Plano Clark, 2011), using qualitative and quantitative analysis of semi-structured interview data, to investigate firms’ actions in practice and how they viewed the choice of IFRS (including their perceived adoption costs and benefits), Reid & Smith (2007b), Schipper (2010). Although we found wide variation in the perceived net benefits of implementing IFRS, in the event, none of the Taiwanese listed companies adopted IFRS early. To explore the reason behind this unusual situation, we examine why every company withdrew from early IFRS adoption – indeed, even at the last minute. We use a detailed case study approach. Our analysis shows this late withdrawal is due primarily to the frequent changes in regulations, and secondarily to the lack of preparation time for early adoption. We find that both financial reporting standards and the feasibility of execution are important to managers in making their decision. We conclude that: (a) policy makers should ensure feasibility of the timeline for introducing new regulations, as short-notice of changes would limit adoption; and (b) accounting authorities should avoid changing regulations too often, as this increases corporate risk, and thereby reduces incentives for early adoption. Our research also contributes to knowledge by calibrating accounting costs and benefits: showing clearly how they influence corporate choices.

KW - international financial reporting standards

KW - IFRS

KW - accounting standards

KW - Taiwan

UR - https://bafa.ac.uk/events/events-past/bafa-annual-conference-with-doctoral-masterclasses-2019.html

M3 - Paper

ER -

HSU Y-L, Reid G. Is early adoption really a choice? Evidence on IFRS from Taiwan. 2019. Paper presented at The 2019 Annual Conference of the British Accounting and Finance Association, .