Abstract:

This research aims mainly to investigate the impact of firm characteristics on the adoption of the operating segment accounting standard (IFRS 8 “Operating Segments”) among listed firms in Gulf Cooperation Council (GCC) countries, and the extent to which IFRS 8 “Operating Segments” is applied in these countries. Furthermore, this research examines which country among the six GCC countries has the highest degree of implementation of IFRS 8 “Operating Segments”. The study presents empirical evidence to achieve the mentioned objectives, considering firm characteristics including firm profitability, firm size, firm complexity, firm financial leverage, and firm audit quality; and uses a sample of 385 firms listed in GCC stock markets for the years from 2017 to 2019, which provides 1155 firm-year observations over the three years included in the study. The study uses descriptive statistics, univariate analysis (Pearson correlation), and multivariate analysis (Hierarchical Multiple Regression - HMR) which is also referred to as sequential regression analysis. The results of this study reveal the existence of association between the firm’s characteristics (profitability, firm complexity, firm size and audit quality) and the implementation of IFRS 8 “Operating Segments”. The empirical results show how these characteristics serve as crucial factors influencing the adoption of the operating segment standard, IFRS 8 “Operating Segments”. Accordingly, the current study recommends that future studies should expand their research scope by examining other firms’ characteristics and variables that were not included in the current study, covering a longer time frame and using different mechanisms of measuring the implementation of IFRS 8 “Operating Segments”.