The findings of this study suggest a number of avenues for future research.
First, the differing magnitudes of changes in financial reporting uniformity point to the need for further examination of the factors that may determine whether the adoption of a specific IAS will have a positive or negative effect on the degree of financial reporting uniformity in the adopting country.
Second, future studies can be broadened to include other developing countries that have security exchanges and have adopted the standards issued by the IASB. Any such studies should ideally include both states that have favored wholesale adoption (e.g. Barbados) and those that have chosen to customize the IAS to their local environment (e.g. Jamaica and Nigeria).
Third, future studies could examine other dimensions of quality such as the timeliness of financial reporting, compliance with IAS requirements and the quality of audit work before and after the adoption of the IAS. An examination of the quality of financial reporting by publicly listed firms is an
especially pressing need given the high level of non-disclosure by firms involved in this study.
Additionally, the reliability of the results may be enhanced by examining the financial statements of a larger number of years before and after the adoption of the IAS.
NOTES
1. Prior to February 1988, ICATT’s policy regarding IAS was to adopt individual IASs as appropriate after conducting a detailed review of each IAS, and making modifications as necessary to suit local peculiarities (Raggay, 2000; Lucie-Smith, 2002). Interviews with three past presidents of ICATT (Messrs. Colin Soo Ping Chow, William Lucie-Smith and Vishnu Maharaj) failed to indicate when this policy began and which IASs were adopted under this policy. However, the results of these interviews did suggest thatMendez’s (1987)assertion that Trinidad and Tobago had adopted all IASs that had been issued at that time was inaccurate. This conclusion is supported byLucie-Smith’s (1986)finding that there was an almost total disregard for IAS among publicly traded firms.
2. The post-independence period also saw North America exerting increasing influence on the Trinidad and Tobago financial reporting environment due to shifting economic linkages and immigration patterns (Mendez, 1987).
3. When the fact that ICATT may have adopted a few individual IAS prior to February 1988 is taken together with the possibility that some publicly traded companies may have voluntarily adopted individual IAS prior to 1988, they potentially reduce the statistical power of the ex post facto research design employed in this study.
4. We used this procedure to enhance the transparency and objectivity of what is essentially a subjective analytical procedure. As the 18 firms in the study effectively constitute the population of publicly traded firms in Trinidad and Tobago (21) at the commencement of the study in 1987, it was not considered necessary to perform probabilistic statistical analyses to test the research question.
5. All the methods/bases used by the firms are currently sanctioned by the IAS except for cash basis expense recognition for retirement benefits and the use of historical cost to value investment in Short-Term Equity.
ACKNOWLEDGMENTS
The author thanks the anonymous reviewers, the editor and participants at the First International Conference on Business Banking and Finance in Trinidad and Tobago 2004 for their helpful comments. He also thanks Anthony Taitt for providing access to the data used in the paper. Any remaining errors or ambiguities are solely the responsibility of the author.
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