The role of regulatory agencies on disclosure compliance and quality: An TFRS 7 application

The main aim of this study is to analyze the disclosure compliance levels and reporting quality regarding ?TFRS 7 Financial Instruments: Disclosures? and Turkish SEC disclosure guidelines of the non-financial firms with consolidated financial reports listed on the ISE between the years 2007-2011 and the effect regulatory agencies have on compliance and financial reporting quality. Under the secondary analysis, firm determinants (size, liquidity, profitability, leverage, market price and auditor size) that shape standard compliance levels and the reasons for variation between standard compliance levels and financial reporting quality of disclosures between firms listed on the same exchange are analyzed. It is believed that by understanding the relationship between compliance and firm characteristics, the reason for non-compliance will become evident. The control checklist method is used during information collection and the data is analyzed using the SPSS statistics program. In order to test compliance levels Anova and T-Test and for determining the relationship between firm characteristics? and compliance levels the correlation analysis is used. The results indicate that non-financial and consolidated firms listed on the ISE between 2007-2011 have a low standards compliance and financial reporting quality level, and contrary to what is proposed in literature, that enforcement has a negative effect on compliance and reporting quality. Keywords: Disclosure Compliance, Disclosure Quality, Institutional Enforcement Effect, TFRS 7