Journals Information
Universal Journal of Accounting and Finance Vol. 1(3), pp. 85 - 94
DOI: 10.13189/ujaf.2013.010301
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Review of Evidence between Corporate Governance and Mandatory IFRS Adoption from the Perspective of Agency Theory and Information Asymmetry
Raymond Leung *, Joe Ilsever
School of Business, University of the Fraser Valley, Canada
ABSTRACT
Prior studies illustrate the issues of agency theory stemmed from the separation between ownership and management. As such, information asymmetry between the agent and principal is the major reason why agent can take advantages from adverse selection and moral hazard, which is the obvious problem in recent accounting scandals. Boards of directors therefore have fiduciary duties to exercise effective corporate governance mechanism to control information asymmetry. We have reviewed the extant literature on whether corporate governance is positively related to more and better disclosure as an attempt to reduce information asymmetry. Also, when IFRS requires more disclosure and IFRS adoption becomes mandatory for many jurisdictions, we examined recent studies on whether firms adopting IFRS with corporate governance regimes can reduce information asymmetry by making themselves more transparent. In general, empirical findings are mixed due to the complex and inter-related nature of corporate governance systems including single-country or cross-country studies, self-constructed or comprehensive corporate governance metrics and whether self-selection and endogeneity can be controlled in modeling.
KEYWORDS
Information Asymmetry, Corporate Governance, Disclosure, IFRS
Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Raymond Leung , Joe Ilsever , "Review of Evidence between Corporate Governance and Mandatory IFRS Adoption from the Perspective of Agency Theory and Information Asymmetry," Universal Journal of Accounting and Finance, Vol. 1, No. 3, pp. 85 - 94, 2013. DOI: 10.13189/ujaf.2013.010301.
(b). APA Format:
Raymond Leung , Joe Ilsever (2013). Review of Evidence between Corporate Governance and Mandatory IFRS Adoption from the Perspective of Agency Theory and Information Asymmetry. Universal Journal of Accounting and Finance, 1(3), 85 - 94. DOI: 10.13189/ujaf.2013.010301.