Evaluating the financial reporting quality under changes in accounting standards of the Indian textile sector
Abstract
Purpose
The study evaluates whether an application of Ind-AS that converged with IFRS in India has enhanced financial reporting quality (FRQ) and how that is reflected in financial performance (FP).
Design/methodology/approach
Design/methodology/approach: The study uses discretionary accruals (DACC) to measure FRQ. In addition, it uses ordinary least square (OLS) regression to examine the association between Corporate Governance attributes, FRQ, and financial performance for a sample of 24 textile companies from 2010 to 2021.
Findings
The results indicate that adopting IFRS has a role in monitoring CG attributes to enhance FRQ; this means the financial reporting qualit improves somewhat with some CG attributes under Ind-AS. In addition, the results demonstrate that financial reporting quality positively influences FP.
Practical implications
There are significant effects on authorities and decision-makers. The findings from this research can benefit lawmakers by providing Ind-AS policy enforcement with more consideration. The results are also helpful for policymakers who want to improve CG and need proof of the significance of high FRQ in this respect.
Originality/value
Given the dearth of research on FRQ in India, the study extends prior literature on FRQ by examining the quality of financial reporting according to the transformation to IFRS in Indian textile firms. The theoretical contribution of the current study is the testing of agency theory towards practices of corporate governance mechanisms on FRQ and FP in the context of the textile sector.
Keywords
Acknowledgements
Erratum: It has come to the attention of the publisher that the article Shayf, A.A.A., Abdullah, M., Tabash, M.I., Saleem, S., Chaudhary, A., Ali, A. and Shamsi, M.A. (2024), “Evaluating the financial reporting quality under changes in accounting standards of the Indian textile sector”, Research Journal of Textile and Apparel, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/RJTA-12-2023-0130, contained the incorrect abstract. This error was introduced during the production process. The abstract has now been corrected. The publisher sincerely apologises for this error and for any confusion caused.
Citation
Shayf, A.A.A., Abdullah, M., Tabash, M.I., Saleem, S., Chaudhary, A., Ali, A. and Shamsi, M.A. (2024), "Evaluating the financial reporting quality under changes in accounting standards of the Indian textile sector", Research Journal of Textile and Apparel, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/RJTA-12-2023-0130
Publisher
:Emerald Publishing Limited
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