Expectation Gap Analysis in Corporate Financial Reporting Practices in India

Abstract

This article assesses the expectation gap of the practitioners and investors, if any, on the selected four parameters regarding India’s corporate reporting practices and in a curtail period of International Financial Reporting Standards (IFRS) convergence transition. Related literature has validated the primary goal of the International Accounting Standard Board to reduce accounting treatment heterogeneity and to reduce information asymmetry by harmonizing the national GAAP into IFRS through adoptions or convergences. India, for multiple reasons, has preferred the convergence route, and the converged versions of IFRS (Ind-AS) have been implemented during the financial year from 2016 to 2017 for the selected industries. For executing the study, it has framed a self-administered questionnaire for conducting an online survey between the two groups of sample respondents chosen through non-probability sampling methods. The questionnaire has been pretested for assaying its reliability and validity before the final survey. The study has concluded that before the outsets of the convergence expectation gap were existed which unlikely to reduce even after the IFRS convergence. Finally, it has acknowledged few limitations, indicated practical implications and sketched the future research road map.

JEL Codes: C83, M41

Keywords

IFRS convergence expectation gap survey weighted expectation gap inferential statistics

Introduction

Literature concurs that International Accounting Standard Board (IASB) has issued International Financial Reporting Standards (henceforth IFRS) referring to ‘IFRS’ as the sum total of (a) International Financial Reporting Standards, (b) International Accounting Standards, (c) interpretations originating from the International Financial Reporting Interpretation Committee (IFRIC) and (d) interpretations issued by the former Standing Interpretations Committee (SIC) prior to 2001 (Ghosh, 2010). Accounting theory has postulated that financial reporting has reduced asymmetric information by disclosing relevant and timely information between corporate managers and stakeholders. While the IASB and the IFRS Foundation have advocated for a single set of global accounting standards (Luca & Kinsey, 2018), blanket IFRS harmonization without any modifications in the prevailing accounting laws of countries have also been contested. The core segment of the corporate annual reports, that is, the mandatory financial statements (FS), has been constructed in compliance with the prevailing Generally Accepted Accounting Principles (GAAP). GAAP originally consists of a combination of guidelines, pronouncements and theoretical advices, and over the years, it has dominated the binding standards of accounting and reporting. The term ‘IFRS adoption’ refers to the adoption of original versions of IFRS as it is without any deviations, while ‘IFRS convergence’ indicates IFRS implementations with few modifications from the original versions as per the socio-economic and legal requirements of the implementing nations. Interestingly, the current Indian GAAP has been mostly aligned with the US GAAP, that is, rule based notwithstanding that the IFRS has been designed as principles based. Indian accounting profession regulator—The Institute of Chartered Accountants of India (ICAI)—has issued the Ind-AS, the converged versions of the IFRS, that is, the principle-based standards where it has formulated the standards, while the interpretations of those standards have been left to the users, and it has been presumed that the Ind-AS would likely exhibit the economic substance and accounting principles of each of the transactions comparatively in a better way than the adopted IFRS. Inasmuch the IASB has unlikely considered the Indian socio, economic and legal aspects; hence the decision for IFRS convergence instead of IFRS adoption. Furthermore, it has also been indicated that in the standard setting exercise of IASB, the Indian standpoint has not been adequately debated prior to its rejections.

It has produced a new vista of significant findings, which are likely to enrich the literature at least in the following manner; first, it has produced a ready reference of practitioners’ and investors’ expectation gap (EG) analysis on IFR’ convergence aspects, probably for the first time in the Indian context. Second, the results have indicated that EG existed before the outset of convergence. It has comprehensively studied the EG of the practitioners and investors on four parameters, viz., reporting practices, role of the company auditors, regulatory requirements and IFRS convergence. Third, it has contested with few studies, which have validated significant improvement in the audit quality and decrease in the audit fees inasmuch as the present study has not traced such precedence. It has reported Ind-AS implementation bottlenecks in line with literature such as inadequate information technology supports, training resources and IFRS-enabled professionals for smooth convergence in the Indian context. Finally, it has comparatively studied the EG between the practitioners and investors and has likely concluded that EG existed before the outset of convergence and did not reduce after the IFRS convergence was affected.

The study attempted to achieve the following objectives:

to study the gap between the information provided by the preparers and expected by the investors;

to study the EG between practitioners and investors;

to study the gap in the perception about the role of company auditor between practitioners and investors;

to enquire the gap between the different regulatory requirements as those would also be representing EG; and

to examine the EG in the context of convergence with IFRS between practitioners and investors.

The rest of the article has been divided into the following sections: the second section discusses the related literature and hypotheses. The third section presents the research methodologies. The fourth and fifth section present the results and discussion, respectively. Finally, the sixth section concludes the article.

The Setting

Literature Review

This article attempted to assess the EG, if any, in the context of India’s IFRS convergence journey based on empirical evidence from practitioners and investors. Taking cognizance, the huge piece of IFRS literature has applied a filtering mechanism and chalked out a boundary to limit the literature exclusively to the study objectives and pertinent parameters. Further, following the functions of the literature review (Hart, 1998), it has reviewed the relevant thematic issues in the financial reporting practices with a specific focus on IFRS to address the EG, if any. It has extensively reviewed the related literature by accessing the digital library of a central university and multiple tertiary sources. A good number of printed books, columns published in English in Indian business newspapers and pertinent official websites of IASB, IFRS, ICAI and MCA have also been reviewed. The choice of literature has justified the epistemological aspects (the study of knowledge) of the current study, which has been derived from the ontology (the probable presence of realities, i.e., the EG of the practitioners and investors about Indian corporate reporting practices). An attempt has been made to trace the trends of IFRS studies in tune with the study objectives thematically in the following subsections.

International Financial Reporting Standards Adoption Impacts

Reporting Practices (Accounting Disclosures)

Literature indicates that more than 130 countries so far have been either adopted or converged with IFRS (Hoshino, 2017) and IFRS-based audited FS have been heavily relied on for attracting foreign capital and for enhanced disclosure practices. Studies addressing impacts of the IFRS on accounting disclosure practices have been attempted globally, producing multiple outcomes such as positive, negative, mixed and no impacts (Trebelsi, 2018). The reporting disclosure regulations have been studied in depth, which have concluded that IFRS adoptions have produced enhanced smoothening of income, earnings aggressiveness and timely recognition of losses; increased value relevance; and comparable FS (Ahmed et al., 2013). Ind-AS has differed from the AS (existing GAAP) on three parameters such as the basis of measurements, substance over form and with focus on the balance sheet. In the Indian context, ICAI has conducted impact study of Ind-AS in 2018 (The Institute of Chartered Accountants of India [ICAI], 2018), which has reported mixed results in terms of no significant effect on the prominent financial parameters, viz. equity, total liabilities, total assets, Property, Plant and Equipment (PPE), intangible assets, borrowings, profit after tax (PAT) and revenue. Positive impacts have been recorded on equity, while marginal decreases have been reported for rest of the variables. It has indicated that good number of companies have recorded line-by-line reconciliations of equity and total comprehensiveness to comply with underlying rationale of Ind-AS 101 (First Time Adoption of Ind-AS). With respect to financial instruments, the report has mentioned the scope for improvement on fair value measurement, financial risk analysis with focus on sensitivity analysis, recognition and measurements of impairment loss under expected credit loss method along with its applied methods, techniques and hedge accounting mechanism. A good number of challenging issues on specific Ind-AS have also been acknowledged, for example, the measurement of deferred tax liability (DTL) and deferred tax asset (DTA) for entities that have been paying tax under minimum alternate tax (MAT) regime for a long period of time (Ind-AS 12), compound instruments and puttable instruments (Ind-AS 32), common control transactions (Ind-AS 103) and unquoted equity instruments, intra-group loans as well as the biological assets (Ind-AS 113).

Earnings Management

Earnings management (EM) refers to the application of discretionary accounting practices to influence the FS to report an outcome which has not been correlated with corresponding accounting policies. Studies that have been attempted in the European countries indicate that mandatory IFRS adoptions have significant positive influence in reducing EM practices applied by unscrupulous management, but per contra, few studies have concluded conversely. Again, voluntary IFRS adoptions have also positive, negative and even insignificant impacts on the EM (Van Tendeloo & Vanstraelen, 2005).

Analysts’ Forecasting

Analysts have treated high-tech processors of financial information, particularly accessing the FS. Mandatory IFRS adoptions have indicated significant improvements in the analysts’ forecasting accuracy (Neel, 2017), whereas few studies have mixed outcomes and even show a decrease in the forecasting accuracy. Similarly, voluntary adoptions of IFRS have conceded enhancements in the forecast accuracy as well.

Costs of Capital

Studies concluded that the voluntary IFRS adoptions have yielded mixed results like significantly reduced capital costs in the USA, Cyprus, the EU countries and Germany (Han & He, 2013), while no evidence could be traced in other countries (Daske et al., 2009). Mandatory IFRS adoption has reduced the cost of capital in the European nations, while few studies have contradicted with mixed results. Further, the mixed nature of countries that have adopted IFRS witnessed significant decrease in capital costs post-IFRS adoptions.

Audit Quality

The term ‘Audit quality’ (AQ) in accounting literature refers to the seminal definition as proposed by DeAngelo, (1981) as ‘the market assessed joint probability that a given auditor will both (a) discover a breach in the client’s accounting system, and (b) report the breach’. Documented literature reveals that mandatorily adopted IFRS have improved the AQ in most countries (Quagli et al., 2018), differing with few studies, while others have concluded without any such precedence.

Audit Fees

IFRS, a principle-based accounting standards which has broadly framed the standards and interpretations of those have been left with users of those standards. Moreover, the preparers and auditors require extensive training to switching over from rule-based standards to principles-based standards, resulting in substantial increase in audit costs (De George et al., 2013). Literature has pointed out that mandatory IFRS adoptions have significant impacts on audit fees in varying degrees, that is, the audit fees has reduced post adoptions, while others have shown significant increase in audit fees mostly because of accessing the audit services of IFRS-enabled trained auditors, notwithstanding the contradictions as well.

International Financial Reporting Standards Implementation Challenges

The literature has identified key implementation challenges for both the mandatory and voluntary IFRS adoptions, ranging from lean legal environment to lack of trained accounting staff. The key challenges highlighted in the literature include lopsided role of accounting and regulatory bodies with weak rules and regulations, legitimacy deficits, lack of training resources, trainers, information technology support and trained accountants, taxation and investors’ protection issues, substantial enhancements in audit fees and other related accounting costs, slack in availability of IFRS literature, continuous amendments in IFRS and translation-related bottlenecks (Sharma et al., 2017).

Research Gap

The present study attempted to review the selective literature on IFRS aspects in a systematic manner to trace out the trend of studies as well as to detect the research gap, if any. Indian literature on Ind-AS has primarily focused on the multiple aspects, for example, about banking industries, impact on taxation, disclosures of related party transactions under Ind-AS-24, the associated curve outs and curve ins of Ind-AS, facets of first-time adopters, that is, Ind-AS-101 scope and accounting treatments of business combinations under Ind-AS-103, impact of fair values on corporates, challenges involved in the implementation of revenue recognition standards, that is, Ind-AS-115 in general and in Pharma sector in particular; impacts on reporting practices, impact on real estate sector, impacts of multiple country-specific factors, costs, information technology, infrastructural and training challenges of IFRS implementation (Saurav, 2016). The different hindrances in the implementation and proper executions of Ind-ASs by the Indian corporates have also been studied in depth. The major findings include required committed attitudes by stakeholders, high-value relevance disclosures by IFRS-enabled FS, smoothening of financial gain, reduction in capital costs, significant differences between IFRS and Ind-AS, comparative accounting results, setting conceptual frameworks for addressing IFRS implementation challenges, perception and EG assessments, doubts about accessing quality accounting information from quality FS (EY, 2016). Literature on the Ind-AS has addressed heterogeneous issues, but, unlikely, any comprehensive perception studies so far have been attempted with stakeholders such as investors, financiers, tax authorities, regulators, analysts, practitioners and the like. The present research plans to close the identified gap in the literature by assessing the selected stakeholders—that is, practitioners’ and investors’ expectations about Indian corporate reporting practices as well as gap, if any, in their expectations in a transition period of IFRS convergence through an online survey.

Hypotheses

Reporting Practices

The compiled study on Compliance of Financial Reporting Requirements (ICAI, 2010) has categorically indicated disclosure variations as reported by the Indian corporates, while complying with AS in general and more specifically in the adopted inventory valuation methods (AS-2), the lack of revenue recognition timings (AS-1), faulty conversions of all the balance sheet items with current foreign exchange rates instead of monetary items, non-recognition and disclosure for assurance of the going concern concept. The trends of departure from the mandatorily prescribed AS would likely diminish in the Ind-AS era, and reporting and disclosure practices would also significantly improve, which motivate the current study to frame the hypotheses. Mandatory IFRS adoptions in the European countries have significantly improved the reporting disclosure, transparency, comparability and reduced accounting subjectivity that likely would replicate in the Indian context.

Role of Company Auditor

The ICAI has been optimistic about the global acceptability of Indian accounting practitioners inasmuch as they will likely be expert in dealing with IFRS accounting and procedures in the post-harmonization period (ICAI, 2006). Literature has acknowledged the high expectations from Indian auditors in detecting and curbing financial shenanigans, especially post-corporate governance failures as evidenced from the infamous United Spirits Ltd and Satyam Computers Ltd (Bhattacharyya, 2008). Ind-AS is expected to significantly improve the role of the company auditors in terms of high audit quality, timely detection and preventions of accounting gimmicks, substantial reduction in the EM practices as well as reduction in audit fees.

Ind-AS and Regulatory Requirements

The required modifications in the prevailing legal and regulatory frameworks such as custom, income tax and company law have been attempted for accommodating the principle-based Ind-AS, which has been referred to as curve outs. The ICAI, being an affiliated member of the International Federation of Accountants (IFAC) is committed to promote harmonized accounting system in line with IFRS and accordingly the Companies (Indian Accounting Standards) Rules, 2015, and its subsequent Amendments in 2017 have been issued by the Ministry of Corporate Affairs (MCA) for smooth implementation of Ind-AS. The ICAI, while issuing the Ind-AS, has unequivocally clarified that in case of any disagreement or during situations of conflict with any other law of the land, the provisions of the latter would prevail over the Ind-AS (ICAI, 2006). India is one of those countries that is committed to gradual alignment with IFRS as political pressure, continuous interaction with the overseas and the resource dependencies have probably catalysed with a phase-wise transition to Ind-AS taking place during the 2016–2017 financial year. The ICAI expert bodies have duly considered the multiple conflicting and overlapping provisions of the Securities and the Exchange Board of India Act, Companies Act, the Insurance Regulatory and Development Authority of India Act, Income Tax Act and the Reserve Bank of India Act and have attempted to assess their impacts on the accounting practices in particular and broader economy in general while framing the IFRS-converged standards (ICAI, 2006). It has carefully studied the conflicting provisions of different regulatory requirements on the accounting treatment for identifying the overlapping regulations, if any. Indian Companies Act, 2013, stipulates that every Statement of Profit and Loss and Balance Sheet should comply with accounting standards. Further, the Act stipulates that where FS do not comply with accounting standards, it should disclose the reasons for such deviations. So, in India, true and fair view has been overriding the requirements of compliance with accounting standards. Ind-AS has stressed on the time value method (TVM) as against historical cost methods in the Indian GAAP. The TVM concept has been used in many standards, for example, PPE, financial Instruments, financial liabilities, employee benefit expenses, etc.

International Financial Reporting Standards Convergence

Related literature has concurred that IFRS adoption/convergence would reduce asymmetric information and harmonize the national accounting standards with IFRS. Interestingly, inasmuch as the Indian socio-economic and political business environments have been largely different from that of the European and other Western countries, convergence would address the accounting harmonization in a better manner than blanket IFRs adoptions. Furthermore, the principle-based IFRS has flexibility in interpretations, which would likely yield better outcomes than rule-based standards like AS. Literature has pointed out a significant enhancement in the analysts’ forecasting accuracy in terms of both quality and quantity in the Ind-AS era (ICAI, 2018). Furthermore, mandatory IFRS adoptions in European countries have reduced EM practices significantly, which would likely be replicated in India after IFRS convergence (Lehery & Godbole, 2013). Based on these, it has been hypothesized that:

H₁: Expectation gap exists before the outset of IFRS convergence.

H₂: Expectation gap will reduce after IFRS convergence is affected.

Methodology

Research Design

Cross-sectional study design has been adopted with online survey strategy as executed during the timeline from January 2017 to June 2018. The survey strategy is preferred for accessing its underlying benefits and the rationale for adopting the online survey is indicated in accounting literature as well (Hayes & Baker, 2014).

Methods

Questionnaire Design

The self-administered questionnaire has been designed by adopting few steps. At first, by accessing digital library of a central university, around 319 IFRS research papers with full text have been downloaded and along with 129 columns published on the issue in business newspapers, ICAI concept paper on Ind-AS have been reviewed and 60-items questionnaire has been prepared in 5-point Likert scale. In the second stage, protocol interviews with three subject experts have been arranged for revising the questionnaire and based on mean scores four items have been dropped. In the next stage, a pilot study with randomly chosen 30 respondents has been conducted for evaluating the question order, wording and language as presented by the literature (Zikmund & Babin, 2012) and based on threshold Cronbach alpha score of 0.5, further six items have been dropped from the list. Eventually, the questionnaire along with a cover letter has been annexed and mailed using Google doc.

Sampling Design

Practitioners

The study has divided the study population into practitioners and investors. The term ‘practitioners’ has wider in scope incorporating therein all the practising CAs, CMAs, CSs, CFAs and all other practitioners having postgraduate and PhD degrees. Inasmuch as the contact details of those practitioners were inaccessible, it has not designed the sampling frame and has preferred a non-probability sampling technique, that is, the convenience sampling technique. By accessing multiple sources, it has managed to collect 337 email IDs and has emailed the questionnaire with a cover letter mentioning the user-friendly instructions for filling the same.

Investors

All the stock market investors are presumed as the study population for investor respondents, and by accessing email IDs from two sub-broker agents through personal contacts, 153 respondents are chosen without any choice (till 30 June 2018).

Data

Primary Data

The questionnaire is designed into three sections. In the first section, nominal scale has been used to gather demographic information for eight questions, while the remaining two sections use the 5-point Likert scale. The second and third sections each has been sub-divided into four sections containing 25 paired items focusing on expectations and perceptions about four parameters. The bifurcations between expectation and perception have not been divulged among the respondents for getting unbiased responses. Nevertheless, the items have been divided into eight subsections, but the same has not been revealed to the respondents to avoid unbiased responses. The study has referred the tool as Likert scale and accordingly has been calculated the appropriate Descriptive Statistics, that is, means for assessing the central tendency, SDs and coefficient of variations (CVs) for variability, in line with social scientists (Boone & Boone, 2012). Further, taking into cognizance the controversy in treating the Likert scale as interval or ordinal, it has treated the scale as interval, and the purpose of the scale has remained limited to computing the composite score of EG (summated scale), as advocated by Likert (1932).

Secondary Data

The primary sources include academic articles and articles published in professional journals; secondary sources include a few review articles, theses, monographs and expert opinions published in business newspapers; and tertiary sources include articles from Google Scholar, Research Gate, Indian Citation Index (ICI), Social Science Research Network (SSRN) and information accessible from relevant websites.

Data Analysis Strategy

IBM SPSS-20 (Statistical Package for Social Science) was used for data analysis. Data were collected and analysed for both expectation and perception of the respondents on reporting practices, role of the company auditors, regulatory requirements and IFRS convergences.

Results

Sample Statistics

The demographic questions as designed in nominal scale has been computed using percentage, and that of research problem items framed in the 5-point Likert scale have been summarized with their means and standard deviations (SDs) along with the relative measure—CVs. Respondents’ general information oriented to eight questions framed in nominal scale have been presented using percentage in Table 1. Among the practitioners, majority are men (79.2%), lying in the age group of 18–25 years (30.2%), married (56.6%), general (53.5%), having professional degree (65.40%), chartered accountant by profession (34%), have gathered experience of 0–5 years (37.1%) and have been earning to the tune of ₹1–1.5 million per month (34.59%). As far as investor respondents are concerned, most of them are men (88.27%), lying in the age group of 26-35 years (46.40%), married (73.67%), general in caste (41.83%), graduate (37.25%), have been earning ₹0.05–0.08 million per month (35.94%), have been making investments to the tune of ₹0.01–0.015 million per month (47.72%) and transacted in stock markets 1–3 times per month (59.47%). The 25 paired items related to expectation–perception have been designed in the 5-point Likert scale and have been summarized with their means and SDs as exhibited in the Tables 2 and 3, respectively. Further, the relative measure of dispersion, that is, CVs, has also been computed, which is indicated for the variable role of company auditors; for both sets of respondents, the variation is greater or conversely less consistent.

Table 1.

Sample Statistics of the Respondents

General Information	Practitioners		Investors
General Information	Options	(%)	Options	(%)
Gender	Men	79.2	Men	88.27
Age	18–25 years	30.2	26–35 years	46.40
Marital status	Married	56.6	Married	73.67
Caste	General	53.5	General	41.83
Levels of education	Professional Degree	65.40	Graduate	37.25
Profession	CA	34	–	–
Experience	0–5 years	37.1	–	–
Monthly income (₹)	1–1.5 million	34.59	0.05–0.08 million	35.94
Monthly investments (₹)	–	–	0.01–0.015 million	47.72
Transactions pm (Nos.)	–	–	1–3 times	59.47

Source: Primary data.

Table 2.

Means and Standard Deviations (SDs) of Expectations and Perceptions (practitioners)

Basis of Measurements	Expectations			Perceptions
Basis of Measurements	Means	SDs	CVs (%)	Means	SDs	CVs (%)
Reporting practices	3.85	1.31	34.02	3.62	1.20	33.14
Role of company auditors	4.03	1.61	39.95	3.81	1.32	34.64
Regulatory requirements	4.08	1.16	28.43	3.89	1.20	30.84
IFRS convergence (Ind-AS)	3.93	120	30.53	3.79	1.13	29.81

Source: Primary data.

Table 3.

Means and Standard Deviations (SDs) of Expectations and Perceptions (investors)

Basis of Measurements	Expectations			Perceptions
Basis of Measurements	Means	SDs	CVs (%)	Means	SDs	CVs (%)
Reporting practices	3.73	1.148	30.77	3.64	1.096	30.10
Role of company auditors	4.02	1.329	33.05	3.82	1.248	32.67
Regulatory requirements	4.04	1.124	27.82	3.96	1.215	30.68
IFRS convergence (Ind-AS)	4.02	1.194	29.70	3.87	1.179	30.46

Source: Primary data.

Measurement of Gap

Mean Expectation–Perception Gap Analysis

The EG has been assessed for 25 paired items (50 individual items) distributed on 4 parameters segregated into 25 items each for expectations and perceptions. Tables 4 and 5 present the mean differences of EG, which has been computed by taking the 5-point Likert scale (where 1 = strongly disagree, 2 = disagree, 3 = neutral, 4 = agree and 5 = strongly agree). For the practitioners for 21 paired items positive EG exist and that of investors the positive EG have remained for 22 paired items. The comparative results have indicated that for 20 paired items negative, for 4 paired items positive and for a paired item no mean EG have been computed (Table 6). The positive EG implies that the perceived values are less than the expected values. Thus, it actually indicates a deficit to meet the expectations. On the other hand, negative EGs indicate that perceptions have exceeded the expectations, and EG reduces after the IFRS is affected. Further, pair wise, most of the EG results for both sets of respondents provide evidence that EG is unlikely to reduce even after IFRS convergence.

Table 4.

Mean Scores of Expectation Gap (practitioners)

Basis of Measurements	Expectation (E)		Perception (P)		Mean Expectation Gap (E – P)
Basis of Measurements	Item Nos.	Mean Scores	Item Nos.	Mean Scores	Mean Expectation Gap (E – P)
Reporting practices	1	3.30	26	3.11	0.19
	2	3.79	27	3.54	0.25
	3	3.63	28	3.53	0.10
	4	3.87	29	3.84	0.03
	5	3.82	30	3.89	(0.07)
	6	4.00	31	3.97	0.03
Role of company auditors	7	4.03	32	3.95	0.08
	8	4.03	33	3.92	0.11
	9	4.12	34	4.12	0
	10	4.13	35	3.40	0.73
	11	3.88	36	3.74	0.14
	12	4.03	37	3.64	0.39
	13	4.01	38	3.92	0.09
Regulatory requirements	14	4.08	39	4.01	0.07
	15	4.28	40	3.98	0.30
	16	4.08	41	4.09	(0.01)
	17	4.18	42	3.84	0.34
	18	4.14	43	4.10	0.04
	19	3.76	44	3.34	0.42
IFRS convergence (Ind-AS)	20	3.69	45	3.47	0.22
	21	3.79	46	3.58	0.21
	22	3.84	47	3.76	0.08
	23	4.01	48	3.87	0.14
	24	4.29	49	4.03	0.26
	25	4.01	50	4.08	(0.07)

Source: Primary data.

Table 5.

The Mean Expectation–Perception Gap (investors)

Basis of Measurements	Expectation (E)		Perception (P)		Mean Expectation Gap (E – P)
Basis of Measurements	Item Nos.	Mean Scores	Item Nos.	Mean Scores	Mean Expectation Gap (E – P)
Reporting practices	1	4.04	26	3.27	0.77
	2	3.81	27	3.78	0.03
	3	3.80	28	3.62	0.26
	4	3.88	29	3.88	0.08
	5	3.66	30	3.71	(0.05)
	6	3.95	31	3.51	0.44
Role of company auditors	7	4.21	32	4.04	0.17
	8	4.01	33	3.94	0.07
	9	4.14	34	4.04	0.10
	10	4.12	35	3.37	0.75
	11	3.73	36	3.84	(0.11)
	12	3.99	37	3.63	0.36
	13	3.98	38	3.92	0.06
Regulatory requirements	14	4.05	39	4.01	0.04
	15	4.29	40	3.99	0.30
	16	4.10	41	4.09	0.01
	17	3.81	42	4.21	(0.40)
	18	4.28	43	4.16	0.12
	19	3.74	44	3.31	0.43
IFRS convergence (Ind-AS)	20	4.11	45	3.68	0.43
	21	3.88	46	3.57	0.31
	22	3.91	47	3.84	0.07
	23	3.94	48	4.01	(0.07)
	24	4.07	49	4.04	0.03
	25	4.25	50	4.09	0.16

Source: Primary data.

Table 6.

Comparative Mean Expectation–Perception Gap Differences

Basis of Measurements	Item Nos.	Mean Expectation Gap (E – P)
Basis of Measurements	Item Nos.	Practitioners (P)	Investors (I)	Difference [P – I]
Reporting practices	1 and 26	0.19	0.77	(0.58)
	2 and 27	0.25	0.03	(0.22)
	3 and 28	0.10	0.26	(0.16)
	4 and 29	0.03	0.08	(0.05)
	5 and 30	(0.07)	(0.05)	(0.02)
	6 and 31	0.03	0.44	(0.41)
Role of company auditors	7 and 32	0.08	0.17	(0.09)
	8 and 33	0.11	0.07	(0.04)
	9 and 34	0	0.10	(0.10)
	10 and 35	0.73	0.75	(0.02)
	11 and & 36	0.14	(0.11)	(0.25)
	12 and 37	0.39	0.36	0.03
	13 and 38	0.09	0.06	0.03
Regulatory requirements	14 and 39	0.07	0.04	0.03
	15 and 40	0.30	0.30	0
	16 and 41	(.01)	0.01	(0.02)
	17 and 42	0.34	(0.40)	(0.74)
	18 and 43	0.04	0.12	(0.08)
	19 and 44	0.42	0.43	(0.01)
IFRS convergence (Ind-AS)	20 and 45	0.22	0.43	(0.21)
	21 and 46	0.21	0.31	(0.10)
	22 and 47	0.08	0.07	0.01
	23 and 48	0.14	(0.07)	(0.21)
	24 and 49	0.26	0.03	0.23
	25 and 50	(0.07)	0.16	(0.23)

Source: Primary data.

Weighted Expectation Gap Analysis

The weighted expectation–perception (WEG) has been computed by taking the difference in the weighted arithmetic means (WAM) of item numbers 1 and 26 (respondents’ expectations about the nature of accounting standards, i.e., it should be principles based or rules based and their perceptions as well). The preference for weighted mean has been rationalized based on the relative significance of the 5-point Likert scale scores for the expectation and perception on the 25 paired items, which have been treated as unequally important. In tune with the 5-point Likert scale, the assigned weights in five numerical values have also represented the varying expectations and perceptions. Subsequently, the weighted grand total has been divided by the total weighted assigned numbers 15 (1 + 2 + 3 + 4 + 5 = 15) to derive the WAM for both expectations and perceptions. Finally, the WEG has been computed as WAME−WAMP and the results are presented in Tables 7 and 8, respectively. The results have indicated that for the practitioners, 21 paired items have found positive WEG and that of for the investors the positive WEG have remained for 22 paired items (Table 9). The trend of mean EG results have also affirmed that the WEG results show the presence of positive EG for most of the paired items.

Following the aforesaid procedure, the WEG of the remaining 24 paired items have been chronologically calculated with the results as follows: 1.33, 0.06, 1.67, (1.27), 0.33, 0.54, 1.13, 0, 5.13, 2.93, 3.93, 0.87, 1.34, 1.20, (0.54), 0.47, 0.53, 0.53, 1.07, 1.93, 0.34, 2.67, 0.67 and (2.07).

Table 7.

WEG of Item Nos. 1 and 26 (practitioners)

Likert Scale	Expectation (E)				Perception (P)				WEG
	1	2	3	4(3/2)	5	6	7	8(7/6)	9 (4 – 8)
	Frequency (X1)	Weight (W1)	W1 X1	WAM	Frequency (X2)	Weight (W2)	W2 X2	WAM	9 (4 – 8)
1	51	1	51	–	41	1	41	–	–
2	10	2	20	–	45	2	90	–	–
3	11	3	33	–	13	3	39	–	–
4	44	4	176	–	35	4	140	–	–
5	43	5	215	–	25	5	125	–	–
Total	159	15	495	33	159	15	435	29	4

Source: Primary data.

Table 8.

WEG of Item Nos. 1 and 26 (investors)

Likert Scale	Expectation (E)				Perception (P)				WEG
	1	2	3	4(3/2)	5	6	7	8(7/6)	9 (4 – 8)
	Frequency (X1)	Weight (W1)	W1 X1	WAM	Frequency (X2)	Weight (W2)	W2 X2	WAM	9 (4 – 8)
1	22	1	22	–	41	1	41	–	–
2	10	2	20	–	15	2	30	–	–
3	4	3	12	–	3	3	9	–	–
4	40	4	160	–	49	4	196	–	–
5	77	5	385	–	55	5	275	–	–
Total	153	15	599	39.93	153	15	551	36.73	3.20

Source: Primary data.

Table 9.

Comparative Weighted Expectation Gap (WEG) Differences

Basis of measurements	Item Nos.	Weighted Expectation Gap (E – P)
Basis of measurements	Item Nos.	Practitioners (P)	Investors (I)	Difference [P – I]
Reporting practices	1 and 26	4	3.20	0.80
	2 and 27	1.33	2.87	(1.54)
	3 and 28	0.60	1.27	(0.67)
	4 and 29	1.67	1.00	0.67
	5 and 30	(1.27)	(2.53)	(1.26)
	6 and 31	0.33	0.67	(0.34)
Role of company auditors	7 and 32	0.54	2.27	(1.73)
	8 and 33	1.13	0.67	0.46
	9 and 34	0	0.06	(0.06)
	10 and 35	5.13	7.60	(2.47)
	11 and 36	2.93	(0.53)	(3.46)
	12 and 37	3.93	3.60	0.33
	13 and 38	0.87	1.40	(0.53)
Regulatory requirements	14 and 39	1.34	1.07	0.27
	15 and 40	1.20	1.20	0
	16 and 41	(0.54)	0.07	(0.61)
	17 and 42	0.47	(0.87)	(1.34)
	18 and 43	0.53	1.20	(0.67)
	19 and 44	0.53	6.66	(6.13)
IFRS convergence (Ind-AS)	20 and 45	1.07	1.07	0
	21 and 46	1.93	2.20	(0.27)
	22 and 47	0.34	0.67	(0.33)
	23 and 48	2.67	(1.26)	(3.93)
	24 and 49	0.67	0.27	0.40
	25 and 50	(2.07)	0.53	(2.60)

Source: Primary data.

WEG for remaining 24-paired items have been calculated as 2.87, 1.27, 1, (2.53), 0.67, 2.27, 0.67, 0.06, 7.60, (0.53), 3.60, 1.40, 1.07, 1.2, 0.07, (0.87), 1.20, 6.66, 1.07, 2.20, 0.67, (1.26), 0.27 and 0.53.

Paired Sample t-Test

For comparing the mean of the differences (differed from independent t-test which computes the difference between the means) of the same participant’s expectations and perceptions about the Indian corporate reporting practices, it has applied the paired sample t-test (i.e., two-dependent sample t-test). In running the test, the study has controlled the confounding variables, which is likely to have influence. The results of the test are presented in the Tables 10–13, respectively. Further, the significant differences have also been computed as presented in Table 14. Based on the significant p values, the study likely concludes that for both sets of respondents, the expectations have exceeded the perceptions, implying the presence of EG even after the IFRS convergence is affected.

The descriptive statistics for the first paired sample as shown in Table 10 has been calculated with the mean of expectation as 3.11 and that of perception as 3.30. The last column (SE = s/√N) is measured as the sample SD divided by the square root of the sample size (0.131 and 0.129 for expectation and perception, respectively). Similarly, for the remaining 24 paired items, the descriptive statistics is calculated.

Table 10.

Paired Samples Statistics (practitioners)

Pair	Items	Mean	N	Std. Deviation	Std. Error Mean
1	IFRS should be principle-based accounting standard (expectation) IFRS convergence moves from rule based to principle based (perception)	3.11	159	1.646	0.131
		3.30	159	1.629	0.129

Source: Primary data.

Table 11.

Paired Samples Test (practitioners)

	Paired Differences					t-Test	df	Sig. (2-tailed)
	Mean	Std. Deviation	SE Mean	95% CI of the Difference
	Mean	Std. Deviation	SE Mean	Lower	Upper
Principle-based accounting standard	−0.189	2.463	0.195	−0.574	0.197	−0.966	158	0.036
IFRS convergence moves from rule based

Source: Primary data.

Table 12.

Paired Samples Statistics (investors)

Pair	Items	Mean	N	Std. Deviation (s)	Std. Error (SE) Mean
1	IFRS should be principle-based accounting standard (expectation)	3.04	153	1.634	0.132
	IFRS convergence moves from rule based to principle based (perception)	3.27	153	1.655	0.134

Source: Primary data.

Table 13.

Paired Samples Test (investors)

	Paired Differences					t-Test	df	Sig. (2-tailed)
	Mean	Std. Deviation	SE Mean	95% CI of the Difference
	Mean	Std. Deviation	SE Mean	Lower	Upper
Principle based accounting standard	−0.235	2.499	0.202	−0.635	0.164	−1.164	152	0.024
IFRS convergence moves from rule based

Source: Primary data.

Table 14.

Paired Sample t-Test Sig. Value Differences

Basis of Measurements	Item Nos.	Paired Sample t-Test
Basis of Measurements	Item Nos.	Practitioners (P)	Investors (I)	Difference [P−I]
Reporting practices	1 and 26	0.036	0.024	0.012
	2 and 27	0.089	0.024	0.065
	3 and 28	0.074	0.073	(0.001)
	4 and 29	0.017	0.031	(0.014)
	5 and 30	0.630	0.008	0.622
	6 and 31	0.042	0.725	(0.683)
Role of company auditors	7 and 32	0.040	0.049	(0.009)
	8 and 33	0.041	0.037	0.004
	9 and 34	0.001	0.030	(0.029)
	10 and 35	0.000	0.071	(0.071)
	11 and 36	0.030	0.000	0.030
	12 and 37	0.005	0.158	(0.153)
	13 and 38	0.045	0.005	0.040
Regulatory requirements	14 and 39	0.035	0.050	(0.015)
	15 and 40	0.011	0.011	0
	16 and 41	0.876	0.076	0.800
	17 and 42	0.012	0.512	(0.500)
	18 and 43	0.045	0.053	(0.008)
	19 and 44	0.016	0.016	0
IFRS convergence (Ind-AS)	20 and 45	0.013	0.013	0
	21 and 46	0.011	0.011	0
	22 and 47	0.045	0.056	(0.011)
	23 and 48	0.027	0.197	(0.170)
	24 and 49	0.048	0.089	(0.041)
	25 and 50	0.599	0.001	0.598

Source: Primary data.

Note: Insignificant values have shown in Italic.

Adopting the same procedure, sig. values for the reminder of the 24-paired items have been computed as (0.089, 0.074, 0.017, 0.630, 0.042, 0.040, 0.041, 0.001, 0.000, 0.030, 0.005, 0.045, 0.035, 0.011, 0.876, 0.012, 0.045, 0.016, 0.013, 0.011, 0.045, 0.027, 0.048 and 0.599).

From Table 12, the means of the first paired items for expectation and perception are computed as 3.04 and 3.27 and that of the SE of means are calculated as (s/√N) 0.132 and 0.134, respectively. In the same fashion, for the 24 paired items, the relevant descriptive statistics are calculated.

Applying the same mechanism, the p values for rest of the 24 pairs are computed as (0.024, 0.073, 0.031, 0.008, 0.725, 0.049, 0.037, 0.030, 0.071, 0.000, 0.158, 0.005, 0.050, 0.011, 0.076, 0.512, 0.053, 0.016, 0.013, 0.011, 0.056, 0.197, 0.089 and 0.001).

Chi-square Goodness of Fit Test

Since the Likert scale has five options subject to only one linear constraint ∑O = ∑E = 159, df = 5 − 1 = 4. Tabulated value for χ² for 4 df at 5 per cent significance level is 9.488. Since the calculated value of χ² = 134.9 >tabulated value 9.488, it is highly significant, and null hypothesis is rejected at the 5 per cent level of significance. Hence, we can conclude that practitioners’ expectations and perceptions about converged IFRS is principle-based accounting standard and moves from rule-based standards, which is unlikely to be similar, indicating the presence of EG. (Table 15). Adopting the same procedure, the chi-square tests for the first paired items of the investors (Table 16) and comparative scores have been summarized (Table 17), respectively.

The study has set the null hypothesis that there is no EG, that is, to say the expectation about ‘Accounting standards should be principles based in preference to rule based’ should match with their perception that ‘IFRS convergence moves from rule based to principles based accounting’.

Table 15.

Chi-square Test for Item Nos. 1 and 26 (practitioners)

Likert Scale	O	E	(O − E)	(O − E)²	(O − E)²/E
1	41	51	−10	100	1.96
2	45	10	35	1,225	122.5
3	13	11	2	4	0.36
4	35	44	−9	81	1.84
5	25	43	−18	324	7.53
Total	159	159			134.19

Source: Primary data.

Table 16.

Chi-square Test for Item Nos. 1 and 26 (investors)

Likert Scale	O	E	(O − E)	(O − E)²	(O − E)²/E
1	41	22	19	16.40	16.40
2	15	10	5	2.50	2.50
3	5	5	0	0	0.25
4	47	39	8	1.64	2.02
5	45	77	−32	13.29	6.28
Total	153	153			33.83

Source: Primary data.

Table 17.

Comparative Chi-square Score Differences

Basis of Measurements	Item Nos.	Chi-square Score
Basis of Measurements	Item Nos.	Practitioners (P)	Investors (I)	Difference [P − I]
Reporting practices	1 and 26	134.19 (R)	33.83 (R)	100.36 (R)
	2 and 27	34.15 (R)	19.52 (R)	14.63 (R)
	3 and 28	25.86 (R)	133.70 (R)	(107.84) (R)
	4 and 29	38.86 (R)	26.48 (R)	12.38 (R)
	5 and 30	20.26 (R)	29.91(R)	(9.65) (R)
	6 and 31	0.23 (A)	3.10 (A)	(2.87) (A)
Role of company auditors	7 and 32	11.58 (R)	27.70 (R)	(16.12) (R)
	8 and 33	3.16 (A)	7.74 (A)	(4.58) (A)
	9 and 34	24.55 (R)	8.34(A)	32.89
	10 and 35	55.78 (R)	86.83 (R)	(31.05) (R)
	11 and 36	39.80 (R)	28.55 (R)	11.25 (R)
	12 and 37	81.37 (R)	131.07 (R)	(4.97) (R)
	13 and 38	44.49 (R)	19.29 (R)	25.20 (R)
Regulatory requirements	14 and 39	20.60 (R)	72.81 (R)	(52.21) (R)
	15 and 40	125.44 (R)	15.16 (R)	110.28 (R)
	16 and 41	102.24 (R)	13.16 (R)	89.08 (R)
	17 and 42	26.35 (R)	9.78 (R)	16.57 (R)
	18 and 43	59.02 (R)	24.58 (R)	34.44 (R)
	19 and 44	163.94 (R)	81.43 (R)	82.51 (R)
IFRS convergence (Ind-AS)	20 and 45	4.15 (R)	91.64 (R)	(87.49) (R)
	21 and 46	14.66 (R)	50.07 (R)	(35.41) (R)
	22 and 47	10.06 (R)	14.37 (R)	(4.31) (R)
	23 and 48	14.17 (R)	25.29 (R)	(11.12) (R)
	24 and 49	2.81 (A)	3.71 (A)	(0.90) (A)
	25 and 50	4.34 (A)	8.59 (R)	(12.93)

Source: Primary data.

Note: Difference values of (Accept) and (Reject) between two sets of respondents have been shown in bold while accepted scores of both of them for any particular pair have been shown in Italic.

Finally, the significant results have supported likely to refute the H1 and the study has probably to conclude that EG has been persisted before the outset of convergence. The positive Mean EG, WEG values, significant p values along with significant chi-square test scores have provided evidence unlikely to reject H₂, i. e., in other words, EG unlikely to reduce after IFRS convergence is affected.

Discussion

The study assess the practitioners’ and investors’ EG about the Indian corporate financial reporting practices in the transition period of IFRS convergence and accordingly has set five objectives followed by two hypotheses. The EG about reporting practices indicates variability of EG for practitioners and investors and as measured by the CVS have been computed at moderate levels. As far as the mean EG and WEG have been concerned, for both set of respondents for five paired items positive and for a pair negative results have been computed. The positive EG implies that the perceived values are less than the expected values; thus, it actually indicates a deficit to meet the expectations. On the other hand, negative EG indicates that perceptions have exceeded the expectations and EG has reduced after the IFRS is affected. The dependent paired sample t-test has shown significant results for both sets of respondents for five-paired items, while insignificant results for a paired item for practitioners have been calculated. Further, the significant chi-square test output has also supported to reject the null hypotheses for both sets of respondents for the five paired items and for a paired item it has likely to accept. The comparative results have indicated interesting facts, for example, mean EG for reporting practices for all the six paired items, for the role of company auditors and regulatory requirements for four paired items and that of Ind-AS convergence for five paired items have pointed out negative mean EG, while, for the rest, either positive or zero mean EG output. The WEG results show that four paired items have been computed for reporting practices, regulatory requirements and for Ind-AS convergence, while five paired items have been computed for the role of company auditors that shows negative WEG. The dependent paired sample t-test has shown negative results for three paired items for reporting practices, for the role of company auditors for four paired items, for regulatory requirements for two paired items and for Ind-AS convergence for three paired items. The chi-square test output has indicated symmetry for all the six paired items by rejecting the null hypotheses for reporting practices and for regulatory requirements. Moreover, for five paired items for the company auditors’ role and for Ind-AS convergence the null hypotheses likely to be rejected while for a paired item for these two parameters the null hypotheses likely be accepted. The EG on the role of company auditor shows EG’s variability for practitioners and investors as measured by the CV and is computed at highest levels, which indicate lesser consistency in the expectation and perceptions resulting in higher EG. The mean EG and WEG results have been concerned, for both set of respondents for six paired items positive and for a pair negative results have been computed. The dependent paired sample t-test shows significant results for both sets of respondents for five paired items, while it shows insignificant results for a paired item for practitioners. Further, the significant chi-square test output has also supported likely to reject the null hypotheses for five paired items and probably to accept for a paired item for both set of respondents. Again, for a paired item for practitioners it has likely to reject while for the same for investors it has probably to accept the null hypothesis. The EG for regulatory requirements, indicates EG’s variability as measured by the CVs that is computed at moderate levels, but such variability is higher for perceptions for both sets of the respondents. The mean EG and WEG results have pointed out that for both set of respondents for five paired items positive and for a pair negative results have been computed. The dependent paired sample t-test shows significant results for both sets of respondents in terms of five paired items, while it shows insignificant results for a paired item for both respondents. Moreover, the significant chi-square test output for all the six paired items has indicated likely to reject the null hypotheses. Finally, the EG for IFRS convergence indicates EG’s variability as measured by the CVs and is computed at moderate levels, but such variability is higher for perceptions for both sets of the respondents. The mean EG and WEG results have pointed out that for both set of respondents for five paired items positive and for a pair negative results have been computed. The dependent paired sample t-test shows significant results for both sets of respondents in term of five paired items, while it shows insignificant results for a paired item for both respondents. Furthermore, the significant chi-square test output has also supported likely to reject the null hypotheses for four paired items and likely to accept for a paired item.

Conclusion

The study assesses the Indian accounting practitioners’ and stock market investors’ expectation–perception gap in terms of the selected parameters on the Indian corporate reporting practices in the transition period of IFRS convergence. The descriptive statistics have been computed and presented by means, SDs and CVs, respectively, for the questions set under the nominal scale. For measuring the EG, it has computed mean EG and WEG, and it has run the dependent sample t-test and chi-square test. The results have been computed for both sets of respondents as well as in a comparative manner. The results of the CVs have been validated among the four parameters, and the highest CVs have been computed for the variable ‘Role of the company auditors’ for both sets of respondents. The mean EG results have indicated positive results for practitioners for 21-paired items and that of for investors for 22-paired items. The comparative results have reported that for 20-paired items negative, for 4-paired items positive and for a paired-item no mean EG have been existed. The WEG results have indicated for practitioners for 21-paired items positive and that of investors for 22-paired items negative results have been computed. Interestingly, the comparative results have indicated a negative WEG for 14 paired items, positive WEG for 9 paired items and no WEG for 2 paired items between these two sets of respondents. The significant p values of the dependent sample t-test indicate that for both sets of respondents, the expectations have exceeded their perceptions, implying the presence of EG after the IFRS convergence is affected. The significant comparative results have also affirmed the individual trend of results. Eventually, the significant chi-square test output rejects the null hypotheses for four paired items, but it accepts it in terms of paired item, while the paired item shows contradicting results. Banking on the significant statistical results, the study refutes the H1 and concludes that EG has existed at the outset of IFRS convergence and such a gap would unlikely reduce after the convergence, that is, in other words, it likely accepts the H₂.

A number of facets related to the study are likely to serve as a caveat before inferring conclusions. First, in line with the purpose of the study, only selected variables and two research hypotheses have been considered and hence other Ind-AS parameters have been excluded from the scope of the present study. Moreover, related literature published in English has only been reviewed and literature in different languages has not been considered. Second, as far as the sample size has been concerned, the study has is conducted with smaller sample size on the ground of parsimony. Besides that, the applied statistical tools might have been suffering from their inherent snags and their partial impacts on the findings hardly be ruled out. Third, the preference of the 5-point Likert scale with the third option as ‘neutral’ attracts the central tendency bias, which might be countered with the 4-point scale. Fourth, the weights considered for computing WEG are taken arbitrarily in line with the numbers assigned in the 5-point Likert scale rather than adapted from research studies on accounting. Fifth, inasmuch as the practitioners likely performing key roles in the implementation of Ind-AS, the probability of responses being politically biased cannot be ruled out entirely. Sixth, the study prefers to measure the EG in a summated manner rather than considering individual responses. Moreover, while men and women respondents have participated in the study, no comparative EG measurements have been carried out. Finally, although the impact of IFRS on the accounting quality has substantially depended on the applied model, as a proxy on the financial analysts’ information environment, the present research has excluded any such accounting model from its periphery.

Multiple practical implications for stakeholders have been identified. First, the study has comprehensively measured the EG about Indian corporate reporting practices with special emphasis on IFRS convergence in a transition period of IFRS convergence. Further, the EG about Ind-AS as reported in the study likely be duly considered by the practitioners, the existing and potential stock market investors while chalking out the audit plans and in redesigning their portfolios especially for those stocks where the prevailing corporate governance practices unlikely be sound enough, widening their EG. Second, statistical results have reported the presence of the highest EG in terms of the role of the company auditors, probably due to the audit failures in the infamous Satyam computer saga. Third, it has indicated that the EG of the practitioners and investors unlikely to reduce even after the IFRS convergence is affected. So, in other words; practitioners should be cautious while dealing with highly flexible principle based Ind-AS accounting measurements and disclosures. The investors, in the light of the findings of the current study, may use the report for enhancing their due diligence while designing their portfolios. Fourth, the foreign analysts and auditors may use the report with due diligence before deriving any conclusion about working with/for Indian corporates. Finally, the EG as indicated in the report may be rigorously studied by practitioners for tracing out the areas where such gap is indicated at higher levels and efforts may be adopted for closing the gap to the extent possible.

The road map for further research has also been sketched out. First, a number of underlying theories of IFRS, such as economic theory of networks, political process theory or the capital need theory and isomorphism, have been adequately addressed in Western countries that is likely to be replicated in the Indian scenario to assess the impacts of those theories. Further, the variants of isomorphism theory —coercive, mimic and normative—are likely tested. Second, global studies have predominantly acknowledged cultural influence on accounting policy choice and on IFRS adoptions, which may be tested in India in a comparative manner for assessing the concurrent validities. Third, it would likely be informative to assess whether cross-country comparability after IFRS adoption or convergence has or has not improved. Fourth, country-level changes in reporting quality scores may be studied in future inasmuch as the post-IFRS adoption earnings quality have produced lower score than the pre-adoption period score as a measure of the strength of implementation. Finally, research agenda in future may be on divergent accounting parameters such as inventory valuation methods and techniques, valuations of PPE and intangibles as well as techniques adopted of fair value measurements in a comparative manner with IFRS adopters and IFRS converged firms. Further, the impacts of accounting conservatism and other challenging issues of Ind-AS may also be studied in a rigorous manner.

Footnotes

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

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