IAS/IFRS Adoption and Debt Contracting: Evidence from the UK

2008 ◽  
Author(s):  
Annita Florou ◽  
Urska Kosi
Keyword(s):  
Debt Contracting ◽  
Ifrs Adoption ◽  
The Uk

IFRS Adoption in the EU and the Challenge of Nomenclature Evidence from the UK, France, and Germany

2016 ◽  
pp. 134-143
Author(s):  
Matthias Nnadi ◽  
Sailesh Tanna
Keyword(s):  
Financial Reporting ◽  
Balance Sheet ◽  
Financial Statements ◽  
Stock Exchanges ◽  
The European Union ◽  
Consolidated Financial Statements ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
The Uk ◽  
The Eu

Since the adoption of International Financial Reporting Standards (IFRS) and the subsequent directive by the European Union (EU), all companies operating in the EU are required to report their consolidated financial statements in line with the IFRS. This study examines the consolidated financial statements of the top 170 listed companies in three major EU stock exchanges (UK, France and Germany) and uncovered a disparity in the use of common nomenclatures. The findings reveal that the inconsistencies in the application of terminologies such as statement of financial position instead of balance sheet and sequence of arrangement of assets in order of liquidity constitute the main differences for entities operating in the three countries. Such differences pose an imminent challenge in the comparability and interpretation of financial results.

scholarly journals Mandatory IFRS Adoption and Real/Accruals Bases Earnings Management in the UK

2021 ◽  
Vol 10 (1) ◽  
pp. 25-39
Author(s):  
Mohammad I. Almaharmeh ◽  
Adel Almasarwah ◽  
Ali Shehadeh
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Robust Regression ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Listed Firms ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Mandatory Adoption ◽  
The Uk

Here, the link between the mandatory adoption of International Financial Reporting Standards (IFRS) and Real Earnings Management (REM), as well as Accrual Earnings Management (AEM), will be examined for non-financial listed firms in the London Stock Exchange. Robust regression analysis of the mandatory IFRS adoption will be conducted on the panel data, as well as earnings management using three AEM models and three REM models. Mixed results with respect to the qualities of AEM and REM were notably garnered, with mandatory IFRS adoption positively relating to the Roychowdhury of abnormal cash flow and the Roychowdhury of abnormal production. Meanwhile, the Roychowdhury of abnormal discretionary expenses, standard Jones, and Kothari negatively related to mandatory IFRS adoption, whilst modified Jones showed an insignificant relation to mandatory IFRS adoption. Changes in IFRS adoption and guidelines for UK firms may have an impact on AEM and REM, and, as predicted, mandatory IFRS adoption mostly affects the Kothari model followed by the standard Jones model as proxies for accounting earnings quality.

scholarly journals Mandatory IFRS Adoption and Analyst Coverage: Evidence from the UK

2018 ◽  
Vol 12 (11) ◽  
pp. 435
Author(s):  
Mohammad Issa Almaharmeh ◽  
Hamzah Al-Mawali ◽  
Ghassan Obeidat
Keyword(s):  
Financial Reporting ◽  
Financial Analysts ◽  
Reporting Standards ◽  
Financial Analyst ◽  
Analyst Coverage ◽  
Listed Firms ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Mandatory Adoption ◽  
The Uk

This study investigates whether the mandatory adoption of International Financial Reporting Standards (IFRS) enforce financial analysts to cover the firms with their EPS forecast. After examining a large sample of 10,953 firm year observations from 1,467 distinct UK listed firms for the period between 1990 and 2013, the results suggest that, mandatory IFRS adoption attract more analysts to follow the firms. Where we find the number of financial analyst who cover the IFRS adopters is significantly higher than that for non-adopter firms.

scholarly journals Mandatory IFRS Adoption and Earnings Quality: Evidence from the UK

2018 ◽  
Vol 12 (11) ◽  
pp. 197
Author(s):  
Mohammad Issa Almaharmeh ◽  
Ra’ed Masa’deh
Keyword(s):  
Stock Exchange ◽  
Earnings Quality ◽  
Accounting Standards ◽  
High Quality ◽  
Accounting Earnings ◽  
Ifrs Adoption ◽  
Accounting Numbers ◽  
Mandatory Adoption ◽  
The Uk

This study examines the effect of mandatory IFRS adoption on the quality of accounting earnings for the firms listed in London Stock Exchange. After examining 9056 firm year observations for the period from 1994 to 2013 the results suggest that the mandatory adoption of IFRS leads to higher earnings quality. This study extends the current literature that examines the consequences of mandating IFRS adoption in the UK and shows that adopting high quality accounting standards leads to high quality accounting numbers.

IFRS adoption/reporting and auditor fees: the conditional effect of audit firm size and tenure

2020 ◽  
Vol 28 (4) ◽  
pp. 639-666
Author(s):  
Medhat N. El Guindy ◽  
Nadia Sbei Trabelsi
Keyword(s):  
Audit Fees ◽  
Content Type ◽  
Audit Firm ◽  
Ifrs Adoption ◽  
Audit Firms ◽  
Conditional Effect ◽  
The Uk ◽  
The Cost ◽  
First Time ◽  
Big Four

Purpose This paper aims to investigate the impact of International Financial Reporting Standards (IFRS) adoption on audit and non-audit fees in the UK setting. The study investigates whether UK firms adopting IFRS for the first time or reporting under IFRS, in general, are being charged higher audit and non-audit fees and whether this impact is conditional on audit firm size and tenure. Design/methodology/approach Using empirical data for UK listed firms from 2003-2007, the paper uses a regression model that explains audit and non-audit fees by independent variables measuring auditors’ and auditees’ characteristics including IFRS adoption and reporting. Additional regressions with interaction terms were performed to test the hypothetical conditional impact of auditor size and audit firm tenure on the above-mentioned association. Findings Audit and non-audit fees increase significantly for companies adopting IFRS for the first time and this increase is persistent during later years. In addition, results suggest that both Big four and non-Big four auditors charge higher audit and non-audit fees to their clients adopting or reporting under IFRS in a similar manner. Furthermore, findings indicate that audit firms increase audit and non-audit fees for old and new clients using IFRS which suggests no low-balling effect is detected. Research limitations/implications Results reported in this study provide insights to regulators in jurisdictions similar to the UK regarding the cost of IFRS adoption which includes higher audit and non-audit fees imposed by both Big four and non-Big four audit firms. In addition, this study argues, to some extent, against the notion that auditors may charge lower fees in the early years of the audit engagement to win new audit clients. Originality/value To the best of the knowledge, the findings are unique at two levels. First, the paper provides evidence on the cost of using IFRS in the UK jurisdiction which was not explored by previous research. Second, the paper investigates the potential conditional effect of auditor size and audit tenure on the association between IFRS adoption and auditors’ fees.

scholarly journals Operating cash flow and earnings under IFRS/GAAP: evidence from Australia, France & UK

2015 ◽  
Vol 13 (1) ◽  
pp. 1346-1358 ◽  
Author(s):  
Lious Ntoung Agbor Tabot ◽  
Huarte Galván Cecilio ◽  
Felix Puime Guillén
Keyword(s):  
Cash Flow ◽  
Value Relevance ◽  
Explanatory Power ◽  
Cash Flows ◽  
Ifrs Adoption ◽  
Operating Cash Flows ◽  
Income Statement ◽  
Operating Cash Flow ◽  
The Difference ◽  
The Uk

The purpose of this paper is to investigate the difference in the value relevance of operating cash flow and earnings in stock price before and after the mandatory IFRS adoption. The study basically uses Feltham and Ohlson (1995), Joos (1997) and other related studies valuation model. Using a sample of firms from 3 IFRS countries from 2003 to 2012, we find that operating cash flows seem to be more value relevance than earnings within and across country border after a switch to IFRS in Australia and the UK, and earnings seem to be more value relevance than operating cash flows in France. Additionally, Operating cash flow and earnings convey incremental explanatory power to explain share prices in Australia, France and the UK. After a switch to IFRS in 2005, our study shows that the difference in account number (operating cash flows and earnings) reduces across country border but increases within country when both the IFRS and local accounting standards are used. Taken together, our findings suggests that after a swift to the mandatory IFRS adoption, even though income statement and the statement of cash flow are very vital for strategic decisions, investors in Australia and UK are more likely to pay more value relevance to the statement of cash flow than income statement whereas in France, income state is more required than statement of cash flow.

Influence of a mandatory IFRS adoption on accounting practice

2012 ◽  
Vol 20 (2) ◽  
pp. 93-118 ◽  
Author(s):  
Leopold Bayerlein ◽  
Omar Al Farooque
Keyword(s):  
Financial Reporting ◽  
Content Type ◽  
Accounting Practice ◽  
Ifrs Adoption ◽  
Policy Choices ◽  
Policy Information ◽  
Prior Literature ◽  
The Uk ◽  
Methodological Shortcoming ◽  
Accounting Policy

PurposeThe purpose of this paper is to evaluate the changes of accounting policy choices and the harmonisation of accounting practices for two important financial reporting items within and between three IFRS adopting countries. Furthermore, it aims to address methodological shortcomings in the prior harmonisation literature through the introduction of two newly developed significance assessment methodologies.Design/methodology/approachThe influence of the mandatory IFRS adoption in Australia (AUS), Hong Kong (HK) and the UK on deferred taxation (DT) and goodwill (GW) accounting practices as well as the within and between country harmonisation of accounting practices is investigated through an event type study. These investigations are conducted using a McNemar test with Bowker extension as well as the Split C‐Index with a newly developed bootstrapping significance testing methodology.FindingsThis study demonstrates that the mandatory IFRS adoption in the analysed countries is linked to a significant harmonisation of DT and GW accounting practices between AUS, HK and the UK. Furthermore, the increase of adequate accounting policy information in the financial reporting documents of UK firms over the period of this study is identified as an important harmonisation accelerator.Originality/valueThis study adds to the prior literature due to its focus on the mandatory IFRS adoption within the analysed countries. Furthermore, the introduction of two newly developed methodologies to evaluate the significance of accounting policy choice changes and harmonisation over time addresses an important methodological shortcoming in the prior literature.

A Disadvantage in IFRS Adoption in the UK: The Adverse Consequences of IAS 38

2017 ◽  
Author(s):  
Christina Dargenidou ◽  
Richard H.G. Jackson ◽  
Fanis Tsoligkas
Keyword(s):  
Ifrs Adoption ◽  
The Uk
Sign in / Sign up

Export Citation Format

Share Document