the independent variables. All correlations between independent variables and the IFRS for SMEs
variable are statistically significant (1% and 5% level, respectively) and in the correct directions.
As predicted, the independent variable NATGAAP is highly negatively correlated with the dependent
variable IFRS_SME at the 1% level. The other independent variables LAW and FULLIFRS
are highly positively correlated with IFRS_SME, suggesting that IFRS for SMEs is mainly
adopted by countries that have a common law legal system and experience with full IFRS application
for their non-publicly accountable entities. Although many of these pairwise correlations
are statistically significant, all of the correlations are considerably below 0.80, which indicates no
serious collinearity problem