The effects of compliance on the disclosure requirements of IFRS 7 to cost of equity and stock prices of Philippine listed banks

• Main Authors: Dizon, Luis Miguel T., Mante, Simeon Joseph M., Rodriguez, Kimberly Anne C., Verocel, Jessica Therese A.
• Format: text
• Language: English
• Published: Animo Repository 2016
• Subjects: Financial statements > Standards; Equity > Philippines; Stocks > Prices > Philippines
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/7699
• Institution: De La Salle University

International Financial Reporting Standards are created to give transparent, accountable, and efficient financial information to the financial markets globally. It makes financial statements comparable thus making it easier for investors to study the current performance of companies. In 2005, the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) required all banks to follow IFRS in the country. This study aims to know the degree of compliance of Philippine listed banks and its effect to the cost of equity and stock prices. Information from year 2005 to 2013 was gathered from financial information of sample banks. The selected banks' compliance to IFRS was studied and cost of equity was computed to know whether the degrees of compliance to IFRS have a negative effect to cost of equity which means that when the compliance is higher, the cost of equity will decrease. Regression analysis, particularly panel data regression was used to aid the study. On the other hand, quantitative indices were used to compute for the scores regarding disclosure. The basis of the scores was 1 point for full compliance and 0 for non-compliance.