An Investigation into the Relationship Between Corporate Governance Practices on IFRS Compliance. Evidence From Publicly Listed Companies in Botswana.
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Abstract
Botswana adopted IFRS for listed companies to raise comparability and attract investment. Despite adoption, compliance levels vary between firms. This suggests corporate governance may be an important influence, yet local evidence is limited. This quantitative descriptive–explanatory study used a structured questionnaire administered to officers across publicly listed companies on the Botswana Stock Exchange (BSE). Descriptive statistics, Pearson correlation and multiple regression were used to examine the relationship between governance mechanisms (board independence, audit committees, internal controls, ownership structure) and IFRS compliance. The response rate was 80%. Descriptive results show most firms rated their IFRS compliance as moderate to high (75%). Pearson correlations showed audit committee expertise had the strongest positive relation with IFRS compliance (r = 0.68, p < 0.01), followed by board oversight (r = 0.66) and board independence (r = 0.64). Regression analysis produced R² = 0.62; audit committee expertise (β = 0.26, p < 0.01) and board oversight (β = 0.24, p < 0.05) were the strongest predictors. Strong governance mechanisms especially audit committee expertise and active board oversight are associated with higher IFRS compliance. However, weak regulatory enforcement reduces the full effect of governance.
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