IFRS Adoption - Evidence from a Regulator

We provide descriptive evidence on the enforcement of International Financial Reporting Standards (IFRS) adoption in New Zealand. Although there remains a voluminous literature on the consequences of IFRS adoption, very little is known about the securities regulators' enforcement actions in case of non-compliance with IFRS. In this paper we document the matters raised by the Securities Commission of New Zealand in their Financial Reporting Surveillance Program for the period 2007 and 2010. The results show that main enquiries related to financial statement presentation, financial instruments disclosures, and related party disclosures. Regulators adopt a different perspective to auditors on the importance of various IFRS. This suggests that private enforcement (auditing) and public enforcement (regulation) are complementary activities. We also discuss the implications for current IASB issues, such as materiality and professional judgment in principles-based standards