Voluntary adoption of international financial reporting standards in New Zealand

Abstract

This study aims to examine the efficiency of the reporting infrastructure and investigate factors that influence the voluntary adoption of International Financial Reporting Standards (IFRS) in New Zealand (NZ). For the first objective, extensive literature suggested that the reporting environment in NZ represents a good common-law disclosure system. The infrastructure required to support high quality public disclosures is very well developed in NZ. In terms of the other objective, size, shareholder diffusion, leverage, dual listings and foreign trade, are hypothesized to have significant relationship with early IFRS adoption. However, the results showed that size is the only factor that is significantly related with voluntary adoption of IFRS. Possible reasons and future research opportunities are suggested.