Determinants of accounting policy choices under international accounting standards: evidence from South Asia Academic Article uri icon


  • Purpose The purpose of this paper is to examine the determinants of accounting policy choices under International Accounting Standards (IASs) of listed firms in South Asia. Design/methodology/approach We selected three IASs-based accounting policy choices from 369 listed companies in India, Pakistan and Bangladesh for the financial year 2007-2008. Findings Our results show that firm size, investment opportunity set, leverage and ownership by the general public are significant determinants of accounting policy choice in South Asian countries. However, we do not find a significant relationship between firms’ accounting policy choices and profitability, assets-in-place and taxes. Practical implications Our results suggest that as some flexibility exists in IASB’s accounting standards, this may allow managers to use income-increasing/decreasing methods. There is scope for regulators and standards setters to reduce the alternative methods which are likely improve firms’ reporting quality. Originality/value Our study contributes to the understanding as to what determines managers’ choice of a particular accounting method allowed in IAS.

publication date

  • 2017