The impact of IFRS mandatory adoption on KPIs disclosure quality

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Abstract

The aim of this study is to investigate context, the impact of International Financial Reporting Standards (IFRS) on the Key Performance Indicators’ (KPIs) disclosure quality in the United Kingdom (UK). We used the UK listed firms FTSE 350 in the stock exchange market during the pre-IFRS period and the post-IFRS period (2003 to 2004, and 2006 to 2013). In particular, we examine special events such as the emergence of the 2006 UK Accounting Standard Body (ASB) Guidelines for KPIs best practice, the 2010 IFRS Management Commentary, and the phenomenon of the 2008 financial crisis. The results of this paper show that the UK’s mandatory adoption of IFRS has had a positive and significant effect on the KPIs’ disclosure quality. The results demonstrate, also, that together with the emergence of the 2006 UK ASB Guidelines, the 2008 financial crisis, and the 2010 IFRS Management Commentary have had a positive and significant influence on the quantity and quality of the KPIs’ disclosure.

Keywords: IFRS, Key Performance Indicators (KPIs), Disclosure Quality, the UK

Authors’ individual contribution: Conceptualization — N.C.R.; Methodology — N.C.R., F.W.B.M.D., and K.H.; Investigation — N.C.R., F.W.B.M.D., and K.H.; Writing — Original Draft — N.C.R; Writing — Review & Editing — A.A.; Project Administration — A.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G10, M40, M41, M48

Received: 23.08.2021
Accepted: 10.11.2021
Published online: 11.11.2021

How to cite this paper: Cheikh Rouhou, N., Ben Mrad Douagi, F. W., Hussainey, K., & Alqatan, A. (2021). The impact of IFRS mandatory adoption on KPIs disclosure quality. Risk Governance and Control: Financial Markets & Institutions, 11(3), 55–66. https://doi.org/10.22495/rgcv11i3p4