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International Accounting Standards and Accounting Quality
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In this article, the authors examine whether the adoption of International Accounting Standards (IAS) is associated with higher accounting quality and find that firms applying IAS from 21 countries generally exhibit less earnings management, more timely loss recognition, and more value relevance of accounting amounts than do a matched sample of firms applying non-US domestic standards.Abstract:
We examine whether application of International Accounting Standards is associated with higher accounting quality. The application of IAS reflects the combined effects of features of the financial reporting system, including standards, their interpretation, enforcement, and litigation. We find that firms applying IAS from 21 countries generally evidence less earnings management, more timely loss recognition, and more value relevance of accounting amounts than do a matched sample of firms applying non-US domestic standards. Differences in accounting quality between the two groups of firms in the period before the IAS firms adopt IAS do not account for the post-adoption differences. We also find that firms applying IAS generally evidence an improvement in accounting quality between the pre- and post-adoption periods. Although we cannot be sure that our findings are attributable to the change in the financial reporting system rather than to changes in firms' incentives and the economic environment, we include research design features to mitigate the effects of both.read more
Citations
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Understanding Earnings Quality: A Review of the Proxies, Their Determinants and Their Consequences
TL;DR: This paper pointed out that the "quality" of earnings is a function of the firm's fundamental performance and suggested that the contribution of a firms fundamental performance to its earnings quality is suggested as one area for future work.
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Earnings Management and Investor Protection: An International Comparison
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Mandatory IFRS Reporting around the World: Early Evidence on the Economic Consequences
TL;DR: In this article, the authors examine the economic consequences of mandatory International Financial Reporting Standards (IFRS) reporting around the world and find that market liquidity increases around the time of the introduction of IFRS.
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Financial Statement Effects of Adopting International Accounting Standards: the Case of Germany
Mingyi Hung,K.R. Subramanyam +1 more
TL;DR: In this paper, the effects of adopting International Accounting Standards (IAS) on financial statements and their value relevance for a sample of German firms during 1998-2002 were investigated for the same set of firm-years.
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Do accounting standards matter? An exploratory analysis of earnings management before and after IFRS adoption
Thomas Jeanjean,Hervé Stolowy +1 more
TL;DR: In this article, the authors analyze the effect of the mandatory introduction of IFRS standards on earnings quality, and more precisely on earnings management, focusing on three first-time adopter countries, namely Australia, France, and the UK.
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