Accounting Standards Compliance: Comparison between Manufacturing and Service Sector Companies from India

Abstract

The paper aims at identifying compliance level of Indian Manufacturing and Service sector companies with respect to Accounting Standards and possible company attributes affecting the level of compliance. The level of compliance has been determined by calculating Compliance Index consisting of Disclosures required by Accounting Standards in India. Company attributes like size, age, profitability, leverage, audit firm etc. are considered as explanatory factors. The average compliance has been higher for manufacturing companies (73%) as compared to Service companies (69%). Size, Foreign Listing, Audit firm has been found to be significantly associated with the level of compliance in case of Manufacturing companies whereas only size is significantly associated with level of companies in the case of service companies