Do IFRS Matter in Emerging Countries?
Keyword(s):
This study analyzes the impact of the process of IFRS adoption on earnings management in the emerging country that is probably the most important in the world economy that has adopted in full the IFRS, Brazil. We examine earnings distributions for discontinuities around thresholds before and after IFRS adoption for a sample of Brazilian listed firms for the period 2004-2011. The findings of this study reveal that discontinuities exist, both before and after IFRS implementation, and that there is a decrease in discontinuity. The results of our study suggest that mandatory adoption of IFRS by Brazilian companies is associated with a decrease in earnings management, in particular during the period of full adoption of IFRS (post-2010).