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http://dx.doi.org/10.13106/jafeb.2021.vol8.no9.0053

The Impact of Perceived Transparency, Trust and Skepticism towards Banks on the Adoption of IFRS 9 in Malaysia  

JASSEM, Suaad (Department of Managerial and Financial Sciences, Al-Zahra College for Women)
RAZZAK, Mohammad Rezaur (Department of Management, College of Economics & Political Science, Sultan Qaboos University)
SAYARI, Karima (Department of Managerial and Financial Sciences, Al-Zahra College for Women)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.9, 2021 , pp. 53-66 More about this Journal
Abstract
The global financial crisis in 2008 eroded trust towards the banking industry overall. To make such institutions more transparent, the International Accounting Standard Board developed the International Financial Reporting Standard 9 (IFRS 9). After the announcement of IFRS 9, academic research has primarily focused on examining the stability of banks due to early loan-loss recognition guidelines under the new system. There appears to be a lack of understanding of how IFRS 9 has influenced institutional depositors' opinions of bank trustworthiness. Hence the goal of this study is to determine how the adoption of IFRS 9 by banks has impacted perceptions of transparency, trust, and skepticism, from the perspective of large institutional depositors. This research was conducted in the context of Malaysian banks that follow the IFRS 9 guidelines. A framework is proposed using the signaling theory, leading to the development of a set of hypotheses. The hypotheses are tested with data collected from 654 financial analysts working in Malaysian companies that are large institutional depositors. The results indicate that the adoption of IFRS 9 has led to higher levels of perceptions of bank transparency and trust, and lower levels of skepticism towards such banks.
Keywords
IFRS 9; Banks; Banking Industry; Transparency; Trust; Skepticism;
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