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An International Meeting of American Accounting
Association
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Transparency & Disclosure Scores in the Istanbul Stock Exchange: Did Voluntary IFRS Adoption and Mandatory Corporate Governance Principles Make a Difference? |
Mine H. Aksu
Sabanci University
Arman Kosedag
Berry College
Abstract: Using a Transparency & Disclosure (TD) index previously created by us and S&P, we first associate the TD scores of 52 Istanbul Stock Exchange firms with performance measures and find significant differences in the two extreme quartiles. Second, we use voluntary adoption of IFRS as an indicator of and commitment to TD, and find that the scores and their relationship with performance are higher in early adaptors. We then create a parsimonious 3-attribute Commitment-to-Better-Disclosure Index and observe a high correlation between the two indices. Finally, using a matched pairs design and controlling for IFRS adoption, we are able to attribute the improvement in TD scores in 2004 to the Capital Market Board’s mandatory Corporate Governance (CG) principles. The study should be of interest to researchers, managers, analysts, boards, policy makers and regulators at a time when debate on convergence to IFRS and impact of local CG guidelines has become intense.