Abstract:
The convergence of International Accounting Standards (IAS) with International
Financial Reporting Standards (IFRS) is an important debate among standards setters,
policy makers, regulators, professional bodies and companies worldwide. The
objective of this research is to examine the impact of internal corporate governance
on convergence of International Financial Reporting Standards (IFRS) and to
measure the impact of individual corporate governance factors to the convergence of
IFRS.
Changes of equity during the year were used as the dependent variable of the model
and no of financial and non-financial variables were used as independent variables.
Financial and non-financial data were collected from annual reports published by the
listed manufacturing companies in Colombo Stock Exchange (CSE) during the period
of 2009 to 2015. This six (6) year period was divided into two categories as before
and after convergence of IFRS. All the manufacturing sector companies were selected
as the sample of the research. Due to the unavailability of data, there were 29
companies used for the final analysis. Panel data regression was used to analyze data
using E-views software.
The results of the study revealed that, effective internal corporate governance
mechanism helps companies more aligned with convergence of local accounting
standards to IFRS and thereby provide high quality financial information to users of
the information
