Accounting Transparency and Business Concentrations: A Study on Financial Disclosure under IFRS
Teixeira, Sérgio Jesus
Abstract
This article analyzes the relationship between financial disclosure in business combinations and the performance of Brazilian companies that apply International Financial Reporting Standards (IFRS). The research focuses on companies listed on the B3 Stock Exchange (Brazil), exploring how corporate factors such as debt, profitability, return on assets (ROA), size, type of external auditor, major shareholders, and industry influence the level of compliance with the disclosure requirements of IFRS 3 – Business Combinations. The sample consists of 60 companies and is based on data extracted from their 2018 annual reports. The results indicate that size, debt, and industry type are positively associated with the level of compliance, while profitability, ROA, auditor quality, and shareholder structure were not significantly related. The study contributes to the literature on financial disclosure and corporate governance by offering relevant empirical evidence for emerging countries and suggesting recommendations for accounting regulators and standard setters.
Keywords
financial disclosure; business combinations; corporate performance; IFRS;
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Malaysia: The influence of family control and the value (ir)relevance of compliance
levels. Accounting Forum, 39(4), 328–348. https://doi.org/10.1016/j.accfor.2015.05.003
Abdi, H., Kacem, H., & Omri, M. A. B. (2018). Determinants of web-based disclosure in the
Middle East. Journal of Financial Reporting and Accounting, 16(3), 420–444.
https://doi.org/10.1108/JFRA-11-2016-0093
Abid, A., Shaique, M., & ul Haq, M. A. (2018). Do Big Four auditors always provide higher
audit quality? Evidence from Pakistan. International Journal of Financial Studies, 6(2),
58–70. https://doi.org/10.3390/ijfs6020058
Abro, S. A., & Awan, A. G. (2020). Impact of profitability on financial disclosure: Evidence
from manufacturing firms in Pakistan. Journal of Accounting and Finance, 7(1), 22–35.
Acar, E., & Ozkan, S. (2017). Corporate governance and provisions under IAS 37. Euromed
Journal of Business, 12(1), 52–72. https://doi.org/10.1108/EMJB-11-2015-0058
Agyei-Mensah, B. K. (2017). The relationship between corporate governance, corruption and
forward-looking information disclosure: A comparative study. Corporate Governance:
The
International
Journal
of
Business
in
Society,
17(2),
284–304.
https://doi.org/10.1108/CG-07-2016-0137
Baboukardos, D., & Rimmel, G. (2014). Goodwill under IFRS: Relevance and disclosures in an
unfavorable
environment.
Accounting
Forum,
38(1),
1–17.
https://doi.org/10.1016/j.accfor.2013.04.002
Baek, J. S., & Kim, J. (2015). Cofounders and the value of family firms. Emerging Markets
Finance and Trade, 51(3), 20–33. https://doi.org/10.1080/1540496X.2015.1039898
Bia?ek, A., & Matusiewicz, A. (2015). Determinants of the level of information disclosure in
financial statements prepared in accordance with IFRS. Accounting and Management
Information Systems, 14(3), 453–482.
Bykova, A., & Jardon, C. M. (2018). IFRS adoption and value relevance of accounting
information: Evidence from emerging markets. Journal of Accounting Research and
Audit Practices, 17(2), 85–102.
Carp, M., & Toma, C. (2018). Timeliness of earnings reported by Romanian listed companies.
Accounting and Management Information Systems, 17(1), 46–68.
Chen, E., Gavious, I., & Lev, B. (2017). The positive externalities of IFRS R&D capitalization:
Enhanced voluntary disclosure. Review of Accounting Studies, 22(2), 677–714.
https://doi.org/10.1007/s11142-017-9399-5
Devalle, A., Rizzato, F., & Busso, D. (2016). Disclosure indexes and compliance with
mandatory disclosure: The case of intangible assets in the Italian market. Advances in
Accounting, 35, 8–25. https://doi.org/10.1016/j.adiac.2016.01.001
Diri, M., Alnajjar, F., & Hassan, A. (2020). Determinants of compliance with IFRS 3 disclosure
requirements: Evidence from emerging markets. Journal of International Accounting
Research, 19(2), 145–165.
Ebaid, I. E. S. (2023). Corporate characteristics and financial disclosure under IFRS in
emerging economies. International Journal of Accounting and Information Management,
31(1), 1–22.
Elnahass, M., & Doukakis, L. (2019). IFRS and value relevance: Evidence from emerging
markets. The British Accounting Review, 51(3), 291–308.
Fontana, F., Giglio, F., & Quirico, G. (2024). Institutional pressures and disclosure practices in
Latin America. Journal of International Financial Management and Accounting, 35(1),
77–99.
Forte, W., Matonti, G., & Tucker, J. (2017). Corporate governance and compliance with IFRS 3
disclosure requirements. Corporate Governance: The International Journal of Business in
Society, 17(4), 789–809.
Frias-Aceituno, J. V., RodrÃguez-Ariza, L., & Garcia-Sánchez, I. M. (2014). Explanatory factors
of integrated sustainability and financial reporting. Business Strategy and the
Environment, 23(1), 56–72.
Glaum, M., Schmidt, P., Street, D. L., & Vogel, S. (2013). Compliance with IFRS 3- and IAS 36-
required disclosures across 17 European countries: Company- and country-level
determinants. Accounting and Business Research, 43(3), 163–204.
Hou, Q., Jin, Z., & Wang, Z. (2016). Disclosure quality and capital market efficiency: Evidence
from IFRS adoption. Journal of International Accounting Research, 15(2), 1–20.
Kaur, J., Sharma, R., & Kumar, S. (2016). Business combinations and financial performance:
Evidence from India. Asian Journal of Accounting Research, 1(2), 78–98.
Lavin, J., & Montecinos-Pearce, S. (2021). Audit quality and disclosure compliance in Latin
America. Accounting in Latin America, 36, 101–125.
Lee, C., Kim, J., & Song, H. (2020). Transparency and corporate combinations under IFRS.
International Journal of Accounting, 55(4), 2050012.
Lucas, M., & Lourenço, I. C. (2014). Determinants of compliance with IFRS 3 disclosure
requirements in Europe. Accounting in Europe, 11(1), 33–57.
Nahar, S., Azim, M., & Jubb, C. (2016). Risk disclosure, cost of capital and bank performance.
Journal of Accounting in Emerging Economies, 6(4), 403–426.
Nistorenco, M. (2019). IFRS 3 compliance and financial performance: Evidence from Central
and Eastern Europe. International Journal of Financial Studies, 7(3), 44–60.
RodrÃguez, A., & Maldonado, R. (2025). Financial disclosure practices and firm performance in
Latin America. Journal of Accounting and Public Policy, 44(2), 120–137.
Silva, R., Martins, A., & Carvalho, F. (2014). Disclosure in business combinations under IFRS:
Evidence from Brazil and Portugal. Revista Contabilidade & Finanças, 25(66), 203–217.
Souza, M., & Borba, J. (2017). Informational transparency in business combinations under IFRS
3: An analysis of Brazilian listed firms. Revista Universo Contábil, 13(4), 76–92.
Zhou, L., Chen, K., & Wong, P. (2025). Corporate transparency, market valuation, and
institutional environment in emerging markets. Asian Review of Accounting, 33(1), 12–
36.
