Regulatory framework compliance in selected large and medium-sized companies : an analysis

Abstract

PURPOSE: The purpose of this study is to determine the level of compliance for selected large and medium-sized companies in Malta. It is useless to implement regulations and accounting standards if companies do not comply. Thus, this purpose is to determine whether companies adhere to selected aspects of the local regulatory framework. The second purpose is to determine the possible company and country-related factors that affect the level of compliance. DESIGN: The mixed method research methodology was adopted. The Quantitative part will determine the level of compliance through a DI while a Regression model was run to determine significant company-related factors. The Qualitative part consists of semi-structured interviews which were conducted to determine any significant country-related factors and to obtain further knowledge about the significance and applicability of company-related factors. FINDINGS: This dissertation has identified that compliance issues exist. Listed companies resulted to be the most companies that comply with the selected aspects of the regulatory framework. The factors that were determined to be significant were type of company, type of auditor, level of enforcement and country’s culture, values and norms. CONCLUSION: To increase the level of compliance, the level of enforcement in Malta must be more stringent and effective. Also, there must be a change in thought, attitude and culture perceived by the preparers of Financial Statements. This is crucial in order to provide relevant and reliable financial information to the users of Financial Statements. VALUE: An understanding of the underpinnings of this study can be harnessed to inform key stakeholders working in this profession about the level of compliance of companies especially of those which are not in the public’s eye such as the private companies. They will also get informed about the possible factors which lead this level of compliance.