Measuring The Compliance Of Ifrs,and The Impact Of Auditing On Financial Reporting Quality

In response to the rise and development of industrial society,Cambodia Government has declared to fully adopt International Financial Reporting Standards(IFRS)for all types of businesses and organizations.However,there is still doubt of whether this requirement is adequate or how well it has been adopted.Following the fraud incidents of The Cambodian Mine Action Centre(CMAC),The Cambodian Institute of Human Rights(CIHR)and Canadia Bank,it has become clear that Cambodia accounting system may have the potential to be abused and lack of precise supervision.Every company is required to nominate an external auditor who is qualified to render an independent opinion on the financial statements.The independent auditors are regarded as essential to their credibility as external verifiers of companies' financial statements.Through time,there have been several audit deficiencies in financial statements leading to the restatement of figures in the financial reports with an unblemished audit report of audit firms with recent bankruptcies of some large companies,for example,Mfone,Beeline,and Cambodia Daily.This investigation is carried out to measure the compliance of IFRS in financial reporting and examine the impact of auditing on financial reporting quality in Cambodia.The study has two main objectives.The first one is to measure the compliance of financial reporting of banks in Cambodia whether IFRS is fully implemented.Since Cambodia Accounting Standards(CAS)is compelled with the International Financial Reporting Standards,it is expected that financial reports of banks in Cambodia should be high in quality.It is found that financial reports of banks in Cambodia is moderately adopted IFRS in preparing those reports.Moreover,it shows that financial reporting in Cambodia need more improvement which should start from providing more information about consistency of the financial reporting and follow by adding other relevance information which is useful for users for making decision and evaluation.The second objective is to find if there is a relationship between auditing and financial reporting quality in Cambodia.The investigation was initiated by forming a framework which associate with auditing and subsequently was able to create its determinations.Those are big and non-big 4 audit firms,audit opinion,audit fee,audit firm size and auditor rotation.Based on these conditions,the researcher form a model to analyze the relationship between these variables and financial reporting quality.It is expected that the variables have significant relationship with financial reporting quality.However,it is shown that not all the variables can interpret relationship between auditing and financial reporting quality well.Audit opinion and audit rotation are able to explain very well about financial reporting quality.Big vs.nonbig 4 audit firms is moderately able to explain about financial reporting quality.This three variables are positive associated with financial reporting quality,but the remainders have no significant relation.