The Role of Corporate Governance in Accounting Discretion Under IFRS: Goodwill Impairment in Australia

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aut.relation.endpage308
aut.relation.issue3en_NZ
aut.relation.journalJournal of Contemporary Accounting and Economicsen_NZ
aut.relation.startpage290
aut.relation.volume12en_NZ
aut.researcherKabir, Mohammad
dc.contributor.authorKabir, Men_NZ
dc.contributor.authorRahman, Aen_NZ
dc.contributor.editorCheng, ACSen_NZ
dc.contributor.editorGul, FAen_NZ
dc.contributor.editorMatolcsy, Zen_NZ
dc.contributor.editorSimunic, DAen_NZ
dc.contributor.editorSrinidhi, Ben_NZ
dc.date.accessioned2017-09-04T03:32:37Z
dc.date.available2017-09-04T03:32:37Z
dc.date.copyright2016en_NZ
dc.date.issued2016en_NZ
dc.description.abstractA major concern with the adoption of International Financial Reporting Standards (IFRS) is the accounting discretion allowed under the IFRS, and its potential opportunistic use by managers. We examine the role of corporate governance in the accounting discretion inherent in goodwill impairment decisions under the IFRS. More specifically, we investigate whether, in Australia, stronger governance strengthens associations between economic factors and goodwill impairment loss but weakens associations between contracting incentives and goodwill impairment loss. Using data from 2007 to 2012, we find evidence consistent with the notion that stronger governance enhances the associations between economic factors and goodwill impairment loss. However, we find that strong governance cannot completely eliminate the opportunistic use of discretion in an impairment decision, especially when pre-impairment income is negative, and when the impairment occurs in the first year of a CEO's tenure. Our results are robust with regard to alternative measures of the dependent variable, firm performance variables, and the governance variable, even after controlling for potential self-selection biases.
dc.identifier.citationJournal of Contemporary Accounting & Economics, 12(3), 290-308.
dc.identifier.doi10.1016/j.jcae.2016.10.001en_NZ
dc.identifier.urihttps://hdl.handle.net/10292/10781
dc.publisherElsevieren_NZ
dc.relation.urihttp://www.sciencedirect.com/science/article/pii/S1815566916300546en_NZ
dc.rightsCopyright © 2016 Elsevier Ltd. All rights reserved. This is the author’s version of a work that was accepted for publication in (see Citation). Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. The definitive version was published in (see Citation). The original publication is available at (see Publisher's Version).
dc.rights.accessrightsOpenAccessen_NZ
dc.subjectGoodwill impairment; IFRS; Corporate governance; Accounting discretion; Australia
dc.titleThe Role of Corporate Governance in Accounting Discretion Under IFRS: Goodwill Impairment in Australiaen_NZ
dc.typeJournal Article
pubs.elements-id214444
pubs.organisational-data/AUT
pubs.organisational-data/AUT/Business & Law
pubs.organisational-data/AUT/Business & Law/Accounting
pubs.organisational-data/AUT/Business & Law/Accounting/Accounting PBRF 2012
pubs.organisational-data/AUT/Faculty of Business, Economics and Law
pubs.organisational-data/AUT/Faculty of Business, Economics and Law/Accounting
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