scholarly journals The Impact of International Financial Reporting Standards (IFRS) on Accounting Quality in Malaysia

2019 ◽  
Vol 5 (1) ◽  
pp. 93-104
Author(s):  
Ooi Chee Keong ◽  
Lee Siew Pengb ◽  
Lim Wan Lengc
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Stock Exchange ◽  
Accounting Quality ◽  
Kuala Lumpur ◽  
High Quality ◽  
Quality Reporting ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
The Impact

There are two objectives of this study, first,it is to examine and compare the accounting quality in pre-and post-implementations IFRS from the viewpoint of investors. Second ,is to identify the differences in the accounting quality between the shariah compliant and non-shariah compliant companies in pre-and post-implementations of IFRS. Using  2169 firm-year observations from firms listed on the Bursa Kuala Lumpur Stock Exchange over the period of 2008  to 2016, the result shows that the implementation of MFRS have reduced the firms’ earnings management. However, this study provides new arguments that Shariah-complaints firms in Malaysia do not necessary have greater incentives to report high-quality reporting based on the investor perspectives.  Our evidence thus help to explains the different impact on IFRS adoption on accounting quality in Malaysia and shariah complaint compnaies.

The Impact of IFRS adoption and AQ upon Earnings Management in Saudi Stock Exchange (Tadawul): تأثير تطبيق المعايير الدولية لإعداد التقارير المالية وجودة المراجعة على إدارة الأرباح للشركات المدرجة في السوق المالية السعودية (تداول)

2020 ◽  
Vol 4 (15) ◽  
Author(s):  
Maha Nasser Allehaidan
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Quality ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Listed Firms ◽  
Discretionary Accrual ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
The Impact

The main purpose of this paper is to examine the impact of International Financial Reporting Standards (IFRS) adoption and Audit Quality (AQ) on Earnings Management (EM) practices in Saudi Arabia listed firms. EM is measured by the discretionary accrual using Healy (1985) and Kothari, Leone, and Wasley (2005) models. The research sample contains 16 Saudi listed firms during the period from 2014 to 2019. Statistical analysis including t-test and linear regression were used to test the research hypotheses. The investigation indicates that there is a negative relationship between IFRS adoption and EM practices, especially if it is combined with AQ, while it found a positive relationship between firms’ size and accrual EM, and no significant impact of AQ on firms’ debt ratio and EM practices. The importance of these results lies in providing clear evidence that the adoption of IFRS in developing countries has helped reduce earnings manipulation practices, which contributes to gaining confidence in Saudi firms and thus attracting many foreign investments.

scholarly journals The impact of IFRS-based accounting standards on earnings management: evidence from Malaysia

2016 ◽  
Vol 5 (1) ◽  
pp. 1
Author(s):  
Yosra Makni Fourati ◽  
Rania Chakroun Ghorbel
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Emerging Market ◽  
Accounting Standards ◽  
Absolute Value ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Earning Quality ◽  
The Impact ◽  
Different Levels

This study aims to examine the consequences of International Financial Reporting Standards (IFRS) convergence in an emerging market. More specifically, we investigate whether the adoption of the new set of accounting standards in Malaysia is associated with lower earnings management. Using a sample of 3,340 firm-year observations across three reporting periods with different levels of IFRS adoption, we provide evidence that IFRS convergence improves earning quality. In particular, we find a significant decrease in the absolute value of discretionary acccruals in the partial IFRS-convergence period (2007-2011), whereas this effect is restrictive after the complete IFRS- implementation.

The Impact of Mandatory IFRS Adoption on Accounting Quality: Evidence from Australia

2012 ◽  
Vol 11 (1) ◽  
pp. 119-146 ◽  
Author(s):  
Yi Lin Chua ◽  
Chee Seng Cheong ◽  
Graeme Gould
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Value Relevance ◽  
Accounting Quality ◽  
Generally Accepted Accounting Principles ◽  
Financial Reporting Standards ◽  
Financial Firms ◽  
Wide Range ◽  
Mandatory Adoption ◽  
The Impact

ABSTRACT Following the mandatory implementation of International Financial Reporting Standards (IFRS) in Australia as of January 1, 2005, this study examines its impact on accounting quality by focusing on three perspectives: (1) earnings management, (2) timely loss recognition, and (3) value relevance. Using four years of adoption experience since the mandate was first made effective in Australia for a wide range of accounting-based metrics and market-based information, we find that the mandatory adoption of IFRS has resulted in better accounting quality than previously under Australian generally accepted accounting principles (GAAP). In particular, the findings indicate that the pervasiveness of earnings management by way of smoothing has reduced, while the timeliness of loss recognition has improved post-adoption. Additionally, the value relevance of financial statement information has improved, especially for non-financial firms. This is despite the fact that there is evidence to suggest that financial firms are engaged in managing earnings toward a small positive target after the mandatory adoption of IFRS in Australia.

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 The Impact of International Financial Reporting Stanadard (IFRS) Adoption on Accounting Quality in Nigerian Listed Money Deposit Banks

2019 ◽  
Vol 5 (1) ◽  
pp. 49
Author(s):  
Rabiu Saminu Jibril
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
Developing Nations ◽  
Annual Reports ◽  
Accounting Quality ◽  
Reporting Standard ◽  
Ifrs Adoption ◽  
Data Analyses ◽  
Research Findings ◽  
The Impact

This study was aimed to empirically evaluate the impact of adoption of IFRS on accounting quality in Nigeria using the money deposit banks. The study utilized the annual reports and accounts of 15 banks listed in the Nigerian Stock Exchange for the period of 2011 to 2014 (that is two years before and two years after adoption); using liner regression analysis was employed in analyzing the data generated for the study. Based on the data analyses, the study found that large loss recognitions have increased in the post adoption period. Based on the research findings, the researcher recommends that developing nations should adopt IFRS as their financial reporting standard as it is capable of increasing their accounting quality. The researcher also recommends that research should be conducted to analyze why IFRS improves the accounting quality based on standard by standard, not the whole package.

scholarly journals The Impact of International Financial Reporting Standards (IFRS) Adoption on The Accounting Quality of Listed Companies In Kenya

2011 ◽  
Vol 1 (1) ◽  
pp. 212 ◽  
Author(s):  
Erick Rading Outa
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Value Relevance ◽  
Listed Companies ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Accounting Quality ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Timely Loss Recognition

AbstractThis study seeks to establish if the adoption of International Financial Reporting Standards (IFRS) in Kenya has been associated with higher accounting quality for listed companies. The International Accounting Standards Board (IASB), in its objectives and preamble, supposes that the beneficial effects from IFRS adoption include transparency, accounting quality and reduced cost of capital. Based on these assumptions, this study applied accounting quality measures; earnings management, timely loss recognition and value relevance to find out whether the adoption of IFRS has led to improvements in accounting quality in companies listed in Kenya. The methodology is based on prior literature definition of metrics of accounting quality mainly earnings management, timely loss recognition and value relevance. The study differs from the previous ones by overcoming difficulties in controlling for confounding factors faced in previous studies which could have led to less reliable results. Three out of the eight metrics indicated that quality had marginally improved while five indicated that it had marginally declined. These mixed outcomes are very much in line with findings in other studies and the study contributes to the debate by explaining why accounting quality outcomes are still not consistent with IFRS promises in spite of improved test conditions. Key words: IFRS; IAS; accounting quality; earnings management; timely loss recognition;

scholarly journals The Impact of International Financial Reporting Standards on Financial Performance

2018 ◽  
Vol 1 (1) ◽  
pp. 20
Author(s):  
Adedoyin Isola Lawal ◽  
Yinka D. Olufemi ◽  
IfeOluwa Adewuyi ◽  
Olubukoye Opeyemi Oye
Keyword(s):  
Financial Performance ◽  
Financial Reporting ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Quality Reporting ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Earnings Per Share ◽  
Foreign Countries ◽  
The Impact

Globalization, capital market crash and the Enron’s case led the accounting profession to insist on the need for a single set of high quality reporting standards. International Financial Reporting Standards (IFRS) were first adopted in 2005 by EU countries while Nigeria agreed to adopt in 2012. The question is: How does IFRS adoption improve the monetary relevance of accounting information? Several studies have explored the monetary relevance of IFRS adoption; however, they are based on foreign countries while Nigerian researches do not contain empirical evidence as they are mostly theoretical. This study therefore seeks to investigate the effect of IFRS adoption on financial performance. The study used correlation research design and data on Earnings per Share (EPS), Change in Earnings per Share (CEPS), Book Value per Share (BVPS) and net profit margin

Does the Mandatory Adoption of IFRS Improve the Association between Accruals and Cash Flows? Evidence from Accounting Estimates

2018 ◽  
Vol 33 (1) ◽  
pp. 39-59
Author(s):  
Jimmy F. Downes ◽  
Tony Kang ◽  
Sohyung Kim ◽  
Cheol Lee
Keyword(s):  
Financial Reporting ◽  
Cash Flows ◽  
Data Availability ◽  
The European Union ◽  
Accounting Quality ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Accounting Estimates ◽  
Accounting Accruals ◽  
Future Cash Flows

SYNOPSIS We investigate the effect of mandatory International Financial Reporting Standards (IFRS) adoption in the European Union on the association between accounting estimates and future cash flows, a key concept of accounting quality within the International Accounting Standard Board conceptual framework. We find that the predictive value of accounting estimates improves after IFRS adoption. This improvement is largely driven by specific types of accounting estimates, such as accounts receivable, depreciation, and amortization expense. We also find that the improvement is concentrated in countries with larger differences between pre-IFRS domestic GAAP and IFRS. Our findings suggest that IFRS allow managers to exercise their judgment to provide information about future cash flows through the more subjective/judgmental portion of accounting accruals. JEL Classifications: M16; M49; O52. Data Availability: The data used in this study are from public sources identified in the study.

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