Corporate Governance and Accounting Practices in Pakistan

Ali, Syed Babar (2012): Corporate Governance and Accounting Practices in Pakistan. Published in: International Journal of Advanced Research No. 5 (May 2015): pp. 192-211.

Abstract

Providing transparency in terms of financial accounting information is one of the objectives of corporate governance. Good accounting practices would result in accounting information that would be very useful to the stakeholders, hence good governance. Employment of effective accounting standards, such as IFRSs can be considered as a better accounting practice that are claimed to produce better disclosure and comparability of accounting information. This study was made to determine whether the companies listed in Pakistan complied with the requirements of IFRS, and whether the financial statements of those companies were harmonized. Thorough document analysis of the selected 51 companies was performed for the selected IFRSs. To determine the degree of harmonization of accounting practices among the companies in Pakistan C index was used. To test for the level of harmonization Chi square test was used. We concluded that, across the board, companies in Pakistan pursue and comply with the requirements of International financial reporting standards (IFRS). This is not the same for the degree of harmonization. Although for most of the IFRS selected degree of harmonization was positively tested there were a few exceptions. The implication is that the users of financial statements should first make adjustments for these items and then compare any aspect of financial condition or performances of the companies in Pakista - See more at: http://www.journalijar.com/article/4503/corporate-governance-and-accounting-practices-in-pakistan/#sthash.9ovp4lAu.dpuf

• Item Type: MPRA Paper
• Language: English
• Keywords: Corporate Governance. Accounting Practices. Accounting Standards
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M4 - Accounting and Auditing; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M4 - Accounting and Auditing > M41 - Accounting

References

Agrawal, A. & Chadha, S., 2005. Corporate governance and accounting scandals. Journal of law and Economics,Vol. XLVIII.

Ashraf, J. & Ghani, W. I., 2005. Accounting development in Pakistan. The International Journal of Accounting,Vol. 40, pp. 175-201.

Ball, R., (2005). International Financial Reporting Standards (IFRS): Pros and Cons for Investors. [Lecture] Institute of Chartered Accountants in England and Wales, 8th September.

Berk, J. and DeMarzo, P., Financial Management. New Dehli: Dorling Kindserly Pvt Ltd.

Choi, F.S et.al., (2002). International Accounting. 4th ed. New Jersey: Prentice-Hall, Inc.

Greuning, H. V., 2006. International Financial Reporting Standards: A practical Guide. 4th ed. Washington, D.C.

The International Bank for Reconstruction and Development The World Bank.

Halbouni, S., 2006. The degree of harmonization of accounting practices. Journal of Economic & Administrative Sciences, Vol.22, pp.51 -76.

Horngren, C. T., Harrison, W. T. and Robinson, M. A., 1995. Accounting. 3rd ed. New Jersey: Prentice-Hall, Inc.

Jaafar, A. & Mcleay, S., 2000. Country Effects and Sector Effects on the Harmonization of Accounting Policy Choice.

Mohammed, N.F. Ahmed, K. & J.I XD., 2011. Accounting Conservatism, Corporate Governance and Political Influence: Evidence from Malaysia. In: 2nd Finance and Corporate Governance Conference, La Trobe University.

Mohamad, S. & Shankaraiah, K., 2004. Corporate governance and accounting standards in Malaysia: An empirical study on practices, [Online], Available through: SSRN.

Nobes, C., 2011. IFRS practices and the persistence of accounting system classification. Abacus. Porter,

G.A. and Norton, C.L., 2001. Financial Accounting: The Impact on Decision makers. 3rd ed. USA: Thomson Learning Inc

Shankaraiah, K & Rao, D.N., 2004a. Corporate Governance and Accounting Standards in India: An Empirical Study on Practices,[Online], Available through: SSRN.

Shankaraiah, K. & Rao, D.N., 2004b. Corporate governance and accounting standards in Oman: An empirical study on practices. In: Accounting, Commerce & Finance conference:

The Islamic Perspective International Conference, Brisbane, June 2004.

Samuels, J M et.al. (1985). International Accounting: A Survey. Kent: Croom Helm Ltd. ISSN 2320-5407

International Journal of Advanced Research (2015), Volume 3, Issue 5, 192-211 212

Shil, NC 2008. Accounting for good governance. JOAAG, Vol. 3, no.1,

Sloan, R. G., 2002. Financial accounting and corporate governance: a discussion

United Nations Conference on Trade and Development, 2006, Guidance on good practices in corporate governance disclosure, (S Panitchpakdi, Secretary-General), United Nations, Geneva.

Van der Tas, L. G., 1988. Measuring Harmonization of Financial Reporting Practice. Accounting and Business Research, Vol. 18, No. 70, pp. 157-169.