Microfinance institutions and International Financial Reporting Standards : An exploratory analysis . - Article - Décembre 2020

I. Pignatel, H. Tchakoute Tchuigoua

I. Pignatel, H. Tchakoute Tchuigoua, « Microfinance institutions and International Financial Reporting Standards : An exploratory analysis  », Research in International Business and Finance, décembre 2020

Abstract

Previous studies analyzing firms’ incentives to choose international accounting standards show that firms with strong contracting incentives will be more likely to comply with International Financial Reporting Standards (IFRS). These studies are mostly centered on developed economies and are based on European and US data. Little is known about development finance organizations’ incentives to choose to draft their financial statements according to IFRS. Because commercialized microfinance institutions (MFIs) have strong contracting incentives, we investigate whether commercialization drives the choice of IFRS and study a pooled international sample of MFIs’ audited financial statements extracted from the MIX from 2007 to 2014. Consistent with our predictions, evidence shows that commercialization and maturity (age) are likely to drive the MFIs’ choice to comply with IFRS. Results are robust after controlling for heterogeneity in national regulations with regard to IFRS.

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