The moderating role of managerial support in the perception of IFRS and preparedness for IFRS application

Abstract

This study investigates how manager support moderates the relationship between the perception of IFRS and preparedness for IFRS application. A survey of 238 large companies in Southern Vietnam was conducted from November 2021 to March 2022, and partial least squares structural equation modeling (PLS-SEM) was used to analyze the data. The findings of this study indicate that perceptions of benefits and managerial support positively influence preparedness for IFRS application. Conversely, perceptions of challenges and disadvantages are negatively associated with preparedness for IFRS adoption. Furthermore, manager support moderates the negative relationship between perceived challenges and preparedness for IFRS application. However, the study does not find that managerial support moderates the impact of perceptions of disadvantages or benefits on preparedness for IFRS application. This study contributes to applying agency theory in the context of IFRS adoption. The finding provides insights into how the perception of IFRS can affect the agency relationship between managers and shareholders and how managerial support can moderate this relationship. The research findings enhance our comprehensive understanding of how manager support moderates the relationship between IFRS perception and preparedness for IFRS application. This insight holds particular significance for large firms, as they commonly encounter challenges and constraints in this context. Managers can enhance IFRS application by implementing appropriate policies that promote a positive perception of IFRS and increase managerial support. However, a limitation of this study is that it relates to data collected primarily from large firms in Southern Vietnam. Expanding the study to include diverse regions could help explore regional variations. Future research in different countries could assess cross-cultural differences in IFRS preparedness and consider additional variables, such as firm characteristics and industry type, for a more comprehensive understanding.