Timing Equity Issuance in Response to Information Asymmetry Arising from IFRS Adoption in Australia and Europe (*)

2008 ◽  
Author(s):  
Shiheng Wang ◽  
Michael Welker
Keyword(s):  
Information Asymmetry ◽  
Equity Issuance ◽  
Ifrs Adoption

scholarly journals The effect of the level of indebtedness on the earnings information content stemming from the mandatory IFRS adoption

2016 ◽  
Vol 4 (1) ◽  
pp. 12
Author(s):  
Hela Turki ◽  
Senda Wali ◽  
Younes Boujelbene
Keyword(s):  
Information Asymmetry ◽  
Information Content ◽  
Financial Reporting ◽  
Forecast Error ◽  
Financial Analysts ◽  
Forecast Dispersion ◽  
Earnings Information ◽  
Ifrs Adoption ◽  
High Level ◽  
The Impact

<p>This paper examines the impact of IFRS / IAS (International Financial Reporting Standards / International Accounting Standards) mandatory adoption on the earning's information content apprehended by the level of information asymmetry and whether this impact differs from one company to another with regard to its level of indebtedness. The information asymmetry is measured by the properties of financial analysts’ forecasts (error and dispersion).This study is conducted over 11 years from 2002 to 2012 by taking as a sample all the companies that belong to the CAC all tradable indexes. The results show a significant effect of these international's standards on financial analysts' forecasts, which stress informational content improvement. In addition, high level of indebtedness associated with IFRS adoption reduces forecast dispersion. By contrast, low level of indebtedness associated with IFRS adoption reduces forecast error.</p>

Market Reaction to the Adoption of IFRS in Europe

2010 ◽  
Vol 85 (1) ◽  
pp. 31-61 ◽  
Author(s):  
Christopher S. Armstrong ◽  
Mary E. Barth ◽  
Alan D. Jagolinzer ◽  
Edward J. Riedl
Keyword(s):  
Information Asymmetry ◽  
Positive Reaction ◽  
Financial Reporting ◽  
Information Quality ◽  
Reporting Standards ◽  
High Quality ◽  
Market Reactions ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Stock Market Reactions

ABSTRACT: This study examines European stock market reactions to 16 events associated with the adoption of International Financial Reporting Standards (IFRS) in Europe. European IFRS adoption represented a major milestone toward financial reporting convergence yet spurred controversy reaching the highest levels of government. We find an incrementally positive reaction for firms with lower quality pre-adoption information, which is more pronounced for banks, and with higher pre-adoption information asymmetry, consistent with investors expecting net information quality benefits from IFRS adoption. We find an incrementally negative reaction for firms domiciled in code law countries, consistent with investors' concerns over enforcement of IFRS in those countries. Finally, we find a positive reaction to IFRS adoption events for firms with high-quality pre-adoption information, consistent with investors expecting net convergence benefits from IFRS adoption.

scholarly journals KOMPARASI KUALITAS INFORMASI DAN ASIMETRI INFORMASI SEBELUM DAN SESUDAH ADOPSI IFRS DI INDONESIA

2019 ◽  
Vol 7 (2) ◽  
Author(s):  
Sugi Suhartono, Yustina Triyani
Keyword(s):  
Information Asymmetry ◽  
Information Quality ◽  
Value Relevance ◽  
Stock Exchange ◽  
Secondary Data ◽  
Linear Regression Method ◽  
Financial Report ◽  
Ifrs Adoption ◽  
Before And After

This research aims to provide empirical evidence relating to information quality and information asymmetry before and after IFRS adoption. This study uses value relevance as a proxy of financial report information quality and bid ask spread as a proxy of information asymmetry. The sample in this study uses secondary data 372 companies listed in Indonesia Stock Exchange form 2008 to 2016. This study uses Multiple Linear Regression method, Chow Test and Paired-Sample t Test Difference Test. The results showed that after IFRS adoption there was an increase in the quality of financial report information and a decrease in information asymmetry.Keywords: IFRS, Quality of information, Information asymmetry

scholarly journals Does Mandatory Ifrs Adoption and Macroeconomic Factors Affect Cost of Equity Capital? Empirical Evidence From South African Listed Firms

2019 ◽  
Vol 5 (1) ◽  
pp. 57-70
Author(s):  
Michael Yeboah ◽  
Andrast Akacs
Keyword(s):  
Information Asymmetry ◽  
South African ◽  
Equity Capital ◽  
Reporting Standards ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Data Set ◽  
Managerial Opportunism ◽  
Ifrs Adoption ◽  
The Cost

Purpose: This paper investigates the collaboration of International Financial Reporting Standards (IFRS) adopted and macroeconomic variables interaction with information asymmetry, analysts following and managerial opportunism affecting the cost of equity capital, and also influence investor’s decision taking on companies in South Africa. Design/Approach: A sample of 49 listed Johannesburg mining and manufacturing firms was extracted from archival database of INET BFA/IRESS SA, Morningstar, and Anupedia. A leverage fixed effects panel data set of firms from 2001 to 2014 was examined, which shows that Breusch-Lagrange Multiplier tests and the test of over-identifying restrictions used, form the basis of the content analysis of the most recent IFRS effect after mandatory adoption. We used a hand-collected dataset between 2000 and 2015. Findings: Our findings suggest that a significant association is found between IFRS and its interactions with managerial opportunism and integrity but with a reasonable statistical effect.  However, the IFRS adoption effect on the cost of equity capital of South African firms’ has no significant effect. Practical implications: This study reveals that most firms report more, the credibility of annual financial statements which may not be sufficient because of the qualitative data for an assessment of managerial opportunism, information asymmetry and analysts following.  Of such myopia of company managers, their reputation causes agency problems and as a result, shareholders interest is mainly focused on improving reporting standards Originality: The research considers dual harmonizing facets: first, that the interaction with IFRS adoption and economic factors impact on the cost of equity capital may be so pathetic and obvious; and second, that IFRS moderation impacts on the cost of equity capital in Sub- Saharan African. This finding should be meaningful to managers, analysts, policymakers, and supervisory bodies in nations with similar capital structure decisions and socioeconomic systems.

Has IFRS Improved Comparability Regarding Earnings Management in Latin America?

2015 ◽  
pp. 56-78 ◽  
Author(s):  
Alex Augusto Timm Rathke ◽  
Verônica de Fátima Santana
Keyword(s):  
Latin America ◽  
Earnings Management ◽  
Information Asymmetry ◽  
Latin American ◽  
Accounting Standards ◽  
International Accounting Standards ◽  
Information Costs ◽  
Ifrs Adoption ◽  
Before And After ◽  
Different Levels

The adoption of IFRS as a unique set of accounting standards is claimed to have the potential to enhance cross-border financial statements comparability, due to a reduction of information costs and information asymmetry. IFRS is a recent issue in Latin America and there is a lack of knowledge about its application in the region, with countries beginning to completely converge to international accounting standards around 2010. This chapter compares the level of earnings management in the first three Latin American IFRS adopters, Brazil, Chile and Peru, considering the periods before and after IFRS adoption. The results show that firms from each country evidence different levels of earnings management before IFRS adoption, and that those differences no longer remain after the adoption of IFRS. The results indicate that IFRS has made financial information more homogeneous and, therefore, enhanced information comparability in Latin America.

scholarly journals IFRS adoption, information asymmetry and the home bias

2016 ◽  
Vol 13 (2) ◽  
pp. 379-389 ◽  
Author(s):  
Baccouri Mouna ◽  
Fedhila Hassouna
Keyword(s):  
Information Asymmetry ◽  
Home Bias ◽  
Capital Controls ◽  
Equity Market ◽  
Economic Indicators ◽  
Portfolio Investment ◽  
Ifrs Adoption ◽  
Governance Indicators ◽  
Mediator Variable

This paper investigates whether IFRS adoption reduces the home bias equity using the information asymmetry as a mediator variable to this relationship. Focusing in countries included in the Coordinated Portfolio Investment Survey “CPIS” our sample is composed by 512 observations (country-year) that cover the period 2003 to 2012. Our finding indicates that the full IFRS adoption reduces the information asymmetry and then the home bias. These results validate our expectations. Nevertheless, the partial IFRS adoption doesn’t clearly support our expectations. We found that the partial IFRS adoption increases significantly the information asymmetry but reduces the home bias. This paper examined the effect of others factors that prior researches indicate that they affect the home bias as the governance indicators, the economic indicators, equity market characteristics and the capital controls.

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