Role of Country-Level Characteristics in Segment Reporting: EU Evidence

Aboud, Ahmed; Helfaya, Akrum

Abstract

Based on a country-level-characteristics framework, we empirically tested the impact of IFRS 8 adoption, the country’s legal system and level of legal enforcement, investor protection, conservatism, and closeness between national GAAP and IFRS on both the quantity and quality of segment reporting. Using a sample of companies from 15 EU countries covering four years (two years preadoption and two years postadoption of IFRS 8), we found that the adoption of IFRS 8 is associated with a decrease in the quantity and an increase in the quality of segment reporting. Moreover, we report that a common-law system, the country-level legal enforcement, and investor protection have a significant and positive impact on the quantity and quality of segment reporting. Meanwhile, country-level conservatism and closeness between national GAAP and IFRS are negatively related to the quantity and quality of segment reporting. In addition to firm-level characteristics, this study extends the prior limited literature by documenting the importance of country-level characteristics as factors that enhance segment reporting practices in Europe. We also discuss the research contributions and implications for research, professional practice, and policymakers.

Citation

Aboud, A., & Helfaya, A. (2021). Role of Country-Level Characteristics in Segment Reporting: EU Evidence. The International Journal of Accounting, 56(04), https://doi.org/10.1142/s1094406021500189

• Journal Article Type: Article
• Acceptance Date: Sep 15, 2021
• Online Publication Date: Sep 15, 2021
• Publication Date: 2021-12
• Deposit Date: Jun 2, 2023
• Journal: The International Journal of Accounting
• Print ISSN: 1094-4060
• Electronic ISSN: 2213-3933
• Publisher: World Scientific Publishing
• Peer Reviewed: Peer Reviewed
• Volume: 56
• Issue: 04
• DOI: https://doi.org/10.1142/s1094406021500189