Audit committee effectiveness, isomorphic forces, managerial attitude and adoption of international financial reporting standards
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Date
2019
Journal Title
Journal ISSN
Volume Title
Publisher
Journal of accounting in Emerging Economies
Abstract
The purpose of this paper is to report the results of a study carried out to establish the
contribution of audit committee (AC) effectiveness, isomorphic forces and managerial attitude to the adoption
of international financial reporting standards (IFRS).
Design/methodology/approach – This study is cross-sectional and correlational. Data were collected
through a questionnaire survey of 67 MFIs that are members of the Association of Microfinance Institutions
of Uganda (AMFIU).
Findings – Both AC effectiveness, isomorphic forces and managerial attitude significantly contribute to the
adoption of IFRS. However, the explanatory power of managerial attitude is subsumed in isomorphic forces
and AC effectiveness. Results further indicate that AC effectiveness partially mediates the relationship
between isomorphic forces and adoption of IFRS. In terms of control variables, ownership and capital
structure are not significant predictors of adoption of IFRS.
Originality/value – To the authors’ knowledge, this is the first study to investigate the contribution of AC
effectiveness, isomorphic forces and managerial attitude to the adoption of IFRS in MFIs using evidence from
a developing country on the African scene like Uganda. Further, earlier literature has not tested the mediating
effect of AC effectiveness in the relationship between isomorphic forces and the adoption of IFRS which has
been reported in this paper.
Description
Keywords
Audit committee effectiveness, Isomorphic forces, Managerial attitude, Microfinance institutions, Uganda
Citation
Bananuka, J., Kadaali, A. W., Mukyala, V., Muramuzi, B., & Namusobya, Z. (2019). Audit committee effectiveness, isomorphic forces, managerial attitude and adoption of international financial reporting standards. Journal of accounting in Emerging Economies. DOI 10.1108/JAEE-08-2018-0084