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Introduction
As International Financial Reporting Standard (IFRS) are designed to be a global common language for businesses to ensure understandability and comparability of financial statements across nations (Choi and Meek, 2011; Lin et al., 2019), this language should be translated in one way only. In other words, IFRS should not be applied in different ways by various firms or countries, as any variations in practice will certainly restrict the main advantages of IFRS adoption. This would also contradict the real meaning of accounting harmonisation that seeks to remove the differences in accounting outputs across countries (Amoako and Asante, 2012). Accordingly, the non-compliance issue might raise doubts regarding the transparency, reliability and quality of financial information between countries (Hajnal, 2017). Moreover, it has been noticed that most IFRS adopters have their own versions of compliance with IFRS, which are somewhat different from those outlined by the International Accounting Standards Board (IASB) (Gina et al., 2016). This, in turn, causes varying levels of compliance with IFRS and is deemed to be a controversial matter. Even though the strategies set towards IFRS adoption may vary between countries, countries should not overlook the importance of proper application as recommended by the IASB. It can also be understood that differences in national infrastructure undeniably play a significant role in non-compliance, especially when it comes to developing countries and the efficiency of the enforcement systems used (Ebrahim, 2014; Pacter, 2016; Pownall and Wieczynska, 2018).
From another perspective, the financial problems faced by companies in 2008 (the year of the financial crisis) have aroused the curiosity of all stakeholders, leading many researchers to investigate the causes beyond that crisis. It has been found that one of the most important reasons at that time was the incorrect employment of financial instruments by companies and the lack of proper control and guidance of such practices. This has prompted the IASB to focus on this problem and attempt to improve the use of financial instruments through the requirements of IFRS 7 (the selected standard for the current study) and IFRS 9 related to disclosure and measurement requirements, respectively, (Deloitte, 2017a, 2017b, 2017d, 2017e). Accordingly, the effects of the financial instruments can be found on different economic aspects as follows: financial information quality, investors...