This study investigates whether mandatory adoption of International Financial Reporting Standards (IFRS) in Africa has a significant impact on earnings' quality, despite the prevalence of weak country governance. The International Accounting Standards Board (IASB) has identified the use of a common set of high-quality standards- the International financial reporting standards ( IFRS)- to enhance global accounting information quality, and promotes global adoption. However, research opinion on the impact of IFRS compliance, on earnings quality improvement is mixed and unresolved. Furthermore, little is known about the possible impact on earnings in firms located in Africa, where country governance quality is relatively low. Thus, this study targets African countries, and uses data from a general sample of 680 firms covering the period 2000 to 2012, to enrich the impact-of-global-IFRS-adoption debate, with African evidence. The study hypothesises that earnings quality differs between mandatory IFRS and domestic accounting standards(DAS) reporting periods in Africa. The research design involves a range of earnings quality proxies and the use of robust regression models. The study finds that relative to DAS, IFRS based earnings are: more persistent and closely associated with future period cash flows; less managed towards small profits and less smoothed. Also, the study finds more timely loss recognition and an increasing frequency of large losses recognition during periods of mandatory IFRS reporting. The results are robust to various additional tests and offer convincing evidence consistent with the hypotheses. These findings provide some direct evidence that mandatory adoption of IFRS is likely to improve earnings quality in some countries with weak governance. Thus, the study extends the literature on factors that influence earnings quality, and the impact of IFRS in countries with relatively weak governance. The research also informs firms, investors, country-level policy makers; and provides a lead for future investigation.

This thesis consists of three self-contained studies on economic consequences of accounting standards. The first study jointly examines the informational value of pension liability recognition mandated in France under IFRS and its effect on firms’ financing decisions. We argue that changes in pension accounting information have affected firms’ required cost of capital and/or investing decisions. Consistent with our hypothesis, we find that changes in financial leverage in the adoption period are negatively related to the surprise component of IFRS pension liability for financially constrained firms, suggesting that despite the existence of informational transfers from early adopters of IAS 19, universal mandatory adoption carries incremental informational content. The second study investigates the performance of the accounting comparability measure introduced in De Franco, Kothari and Verdi (2011). Using Monte Carlo simulations we show that the design of the DKV measure introduces unnecessary variation in estimated cross- firm and period comparability; and further that it cannot successfully identify comparable accounting systems when accounting incorporates information in returns with a lag, particularly so when firms differ in terms of their cost of capital. We suggest the inclusion of lag returns as explanatory variables in the original earnings-return relation in order to increase the measure’s ability to rank firms based on accounting comparability. The third study examines comparability and relevance of published IFRS financial statements, by examining the magnitude and nature of cross-country analyst pro-forma adjustments. We find evidence that accounting earnings comparability is increased among IFRS adopters, but the degree to which real economic performance is captured in accounting earnings still varies considerably across countries. Our analysis also indicates that IFRS adoption increased street adjustments, but less so in countries already requiring high level of disclosures. Finally, we find that analysts adjust reported earnings for fair valuing of financial instruments and expensing of research costs.

Waqf and its management in Malaysia have been very much neglected by the relevant authorities for a relatively long period of time. In Malaysia, waqf is managed by State Islamic Religious Councils (SIRCs), which is the sole trustees for waqf resources. The emergence of Islamic economics and the pressing demands for greater countability and better performance in the public sector organisations provided an impetus for the waqf revival in Malaysia. Thus this study empirically investigated the accounting, accountability and effectiveness of the waqf management in Malaysia. A questionnaire survey examining the current practices of the principal management activities including strategic planning, budgeting and budgetary control, performance measurement and financial reporting was distributed to thirteen SIRCs and two semi-autonomous baytulmal institutions, one in Sabah and the other in Sarawak. Furthermore, a series of semi-structured interviews was conducted on the senior and operational officers of SIRCs/baytulmal institutions, the Department of Awqaf, Zakah and Hajj (JAWHAR), the Malaysia Waqf Foundation (MWF) and the National Audit Department (NAD). Essentially, the study revealed a number of noticeable findings with regard to the principal management activities in SIRCs/baytulmal institutions. Firstly, budgeting in SIRCs/baytulmal institutions appeared to function mainly as planning and control tools. The strict approach to budgetary control in these organisations was to ensure the adherence of spending to the budgets while the efficiency and effectiveness of resource consumption were less emphasised. Delegation of authority and responsibility to operational managers was restricted to budgetary control. Secondly, there were evidences of conspicuous discrepancies in the financial reporting practice. This may have been attributed by the absence of specific accounting framework for Islamic assets and funds held by SIRCs/baytulmal institutions. The financial reporting practice in these organisations had less focused on the stewardship/accountability dimension expected of the public sector and non-profit organisations. Thirdly, performance measurement in SIRCs/baytulmal institutions appeared to be focusing on enhancing the administrative capacity of the organisations. Fourthly, the existence of strategic planning in SIRCs/baytulmal institutions was very limited and mainly conditioned on external requirements. Finally, the study also revealed the presence of inherent challenges in the waqf management in SIRCs/baytulmal institutions, namely, financial inadequacy, shortages of manpower, and limited administrative capacity. The present practice of the principal management activities and the inherent challenges had a profound impact on the extent of accountability and effectiveness of the waqf management in Malaysia.

The current study examined several issues regarding auditor independence from the perspective of an emerging market such as Malaysia. A spate of ‘mini-Enrons’ in 2007 and 2008 has raised questions of investor confidence in the financial system specifically the national stock market. These scandals involving listed companies have highlighted concerns of regulators and other interested parties relating to threats to auditor independence. Factors affecting the ability of auditors to remain independent include long audit tenure, financial dependence on a single audit client, non-audit services provided to audit clients, ex-auditor employment with an audit client and the existence of audit committees. It is therefore timely to examine the importance of auditor independence in the provision of reliable and credible financial information. The current study uses a questionnaire survey to examine users’ (bank loan officers and professional investors) perceptions of the impact of the various factors on auditor independence. The results of the study revealed that Malaysian users of financial statements have serious concerns about the threats to auditor independence. The results also reveal that audit committees are perceived as the main safeguard for auditor independence. In general, both groups of respondents agreed that the current regulations for auditors, as set down by the Malaysian Institute of Accountants’ By-Laws, were sufficient to safeguard auditor independence. However, there are mechanisms that the financial statement users believed should be implemented that could provide greater protection for their investment. For example, the loan officers in this study seemed to prefer mandatory audit firm rotation to partner rotation. Further investigation indicated that differences existed in perceptions across the examined demographic and background variables. The results of the study also suggest that Malaysian loan officers and professional investors still have faith in the auditing profession and this is reflected in their belief that audited financial statements are important for them to make lending and investing decisions.

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The objective of this study is to identify the factors that lead UK non-financial listed companies to voluntary use an IAF. In addition, this study aims to investigate the IAF effectiveness in these companies, the factors affecting this, and the relative importance of these factors. Using the Agency and the Transactions Cost Economics (TCE) theories, the study collected financial and non-financial data from the annual reports and the DataStream for 332 UK non-financial companies listed in the London Stock Exchange main market in 2009. In addition, postal questionnaires were sent to the head of internal audit and the audit committee chairman in 213 companies which have an internal audit department. The study provides evidence that firm size, level of risks, agency problem between owners and managers, and the existence of an effective audit committee are important drivers for the voluntary use of IAF. In addition, it provides strong evidence that firm’s characteristics affect the IAF quality characteristics. Large companies with an effective audit committee are more likely to have high quality IAFs. Furthermore, the questionnaire’s findings provide evidence that IAFs provide different types of both assurance and consulting activities to their companies, and that the majority of respondents are satisfied that the IAF is effective and has a positive impact on internal control, risk management, and governance processes. However, the results indicate that the IAF characteristics significantly affect its scope of services and its perceived effectiveness. Consistent with this, respondents acknowledge that having a strong relationship with the audit committee, adopting risk based internal audit, and having IAF staff with various backgrounds are the most important factors for IAF effectiveness. Collectively, the results of this study suggest the importance of having an IAF to corporate governance and the importance of redesigning it in a way that enhance its effectiveness.

Disclosure in financial statements in general has been the subject of many studies, yet disclosure in banks' financial statements has not yet been given the attention and research it deserves. Such a lack of attention might be due to the financial statements users themselves not paying enough attention to it, or due to the banks' management not being keen to practise more disclosure within their financial statements.In Kuwait, disclosure in general, and within the banking industry in particular, has been receiving more attention for the last ten years or so, but such attention has not been explained yet.International accounting standard No.30 forms the foundation of the disclosure in the banks financial statements and similar institutions, and as Kuwait implemented the International Accounting Standards in 1990, banks fell under the IAS 30 requirements regarding the disclosure in their financial statements. In this exploratory study, two avenues are investigated: first, users' evaluation of the disclosure level within the banks' financial statements in Kuwait; and second, the measurement of the actual disclosure in the banks' financial statements in Kuwait. Asurvey method is applied to evaluate the disclosure level in the banks' financial statements, while an index method is applied to for measuring the disclosure level in the banks' financial statements.