scholarly journals An Empirical Study on the Relationship Between Foreign Investors and Earnings Quality

2019 ◽  
Vol 10 (3) ◽  
pp. 99
Author(s):  
Yohan An
Keyword(s):  
Financial Reporting ◽  
Positive Impact ◽  
Value Relevance ◽  
Earnings Quality ◽  
International Investment ◽  
Foreign Investor ◽  
Data Set ◽  
Foreign Investors ◽  
Financial Reporting Standards ◽  
The Impact

This study examines the impact of foreign investors on earnings quality in emerging capital market using Korean manufacturing firms’ panel data set, regarding competing for international investment and business opportunities during the period 2000 to 2012. This paper tests earnings quality using four proxies based on the International Financial Reporting Standards: 1) persistence, 2) value relevance, 3) conservatism, and 4) accruals quality. This research finds foreign investor is positively associated with only user needs earnings quality; persistence and value relevance. This result shows that the positive impact of foreign investor on earnings quality is evident but limited.

scholarly journals Effects of IFRS on Accounting Information Quality: Evidence for Brazil

2017 ◽  
Vol 9 (5) ◽  
pp. 44
Author(s):  
Julio Cesar Araujo Da Silva Junior ◽  
Joao F. Caldeira ◽  
Hudson Da Silva Torrent
Keyword(s):  
Financial Reporting ◽  
Information Quality ◽  
Positive Impact ◽  
Value Relevance ◽  
Accounting Information ◽  
International Standards ◽  
Sufficient Evidence ◽  
Accounting Quality ◽  
Financial Reporting Standards ◽  
The Impact

Understanding the effects of the International Financial Reporting Standards (IFRS) on accounting quality is fundamental for policy makers and financial market players in general. This paper analyzes whether the adoption of IFRS in Brazil has had the impact on accounting informational quality. To this end, a differentiated empirical strategy was adopted based on two steps: first, a matching of voluntary adopters of norms and non-adopters by propensity score is performed to construct control groups. This is important to mitigate the selection bias problem. Second, the measures of value relevance, timeliness and conservatism of accounting information are estimated using panel data models. The period of analysis extends from 2006 to 2010, with annual information for the first stage and quarterly for the second. The results show a positive impact of international standards on the value relevance. However, for the measures of timeliness and conservatism, sufficient evidence was not found to indicate any impact on the group of companies evaluated.

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.

The Effect of Mandatory Adoption of IFRS on Earnings Quality: Evidence from the European Union

2012 ◽  
Vol 11 (2) ◽  
pp. 1-25 ◽  
Author(s):  
Daniel Zeghal ◽  
Sonda M. Chtourou ◽  
Yosra M. Fourati
Keyword(s):  
European Union ◽  
Earnings Management ◽  
Financial Reporting ◽  
Value Relevance ◽  
Earnings Quality ◽  
The European Union ◽  
Accounting Quality ◽  
Financial Reporting Standards ◽  
Accounting Numbers ◽  
Mandatory Adoption

ABSTRACT This paper addresses the question whether the mandatory adoption of International Financial Reporting Standards (IFRS) is associated with higher accounting quality. More specifically, we investigate whether the application of IFRS in 15 European Union (EU) countries is associated with less earnings management and higher timeliness, conditional conservatism, and value relevance of accounting numbers. Our results suggest that there has been some improvement in accounting quality between the pre- and post-IFRS adoption periods. In particular, we find that firms exhibit an increase in the accounting-based attributes, but a decrease in the market-based after the adoption of IFRS in 2005. Interestingly, the findings are more pronounced for the firms in countries where the distance between the pre-existing national GAAP and IFRS is important. Furthermore, we are unable to identify any change within firms that have converged their local GAAP toward IFRS before the mandatory transition.

A Review of the Literature on IFRS Adoption From the Perspective of the Value Relevance

2019 ◽  
pp. 367-394 ◽  
Author(s):  
Melik Ertuğrul
Keyword(s):  
Literature Review ◽  
Financial Reporting ◽  
Value Relevance ◽  
The European Union ◽  
Archival Research ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Comprehensive Picture ◽  
Mandatory Adoption ◽  
The Impact

International Financial Reporting Standards (IFRS)-based financial reporting has become widespread all around the world especially after its mandatory adoption in the European Union in 2005. There are several objectives of IFRS-based financial reporting, all of which depends on the idea of a single set of high-quality standards as frequently highlighted by promoters of IFRS. This literature review depicts a comprehensive picture of the archival research on the impact of IFRS-based reporting on capital markets from the perspective of the value relevance (VR) concept. First, the VR concept, as well as models employed to measure the VR, are described. Afterwards, selected studies of the archival research are grouped, summarized, and discussed. Finally, archival research is methodologically analyzed by considering different dimensions. All in all, this literature review provides information on IFRS adoption from the perspective of the VR.

scholarly journals Mapping Global Research on International Financial Reporting Standards: A Scientometric Review

2021 ◽  
Vol 12 (3) ◽  
pp. 116
Author(s):  
Oleh Pasko ◽  
Mykola Hordiyenko ◽  
Fuli Chen ◽  
Yarmila Tkal ◽  
Yulia Abraham
Keyword(s):  
Financial Reporting ◽  
Information Disclosure ◽  
Value Relevance ◽  
Disclosure Quality ◽  
Global Business ◽  
Financial Reporting Standards ◽  
The Usa ◽  
The Impact ◽  
Practical Level ◽  
Global Research

For the purpose to provide scholars with a more quantifiable and visualized snapshot of the realm of IFRS research (lingua franca in global business today) we conducted a scientometric review of 973 articles related to the issue published during the period from 2009 to 2020 and indexed in the Web of Science Core Collection. The findings show that the number of related articles has been increasing year by year. The global research on IFRS has been produced chiefly in the USA, England, Australia, China and Germany which not only generated majority of the high-yielding research institutions as well as productive authors but also countries of origins most of the prolific journals. Among the innumerable subject matters debated in these selected papers key are earnings management, information disclosure quality, accounting standards, the impact of IFRS, value relevance, and IFRS adoption. Since 2009, IFRS research bursts can be divided into three stages: 1) the period from 2009 to 2011 - mainly focused on the discussion of the concepts of IAS and IFRS; 2) the period from 2012 to 2014 turned to the theoretical level, and 3) from 2016 to 2020 when the research focused on the practical level. This scientometric review would complement and enrich existing literature by incorporating a quantitative perspective into it.

The Impact of IFRS Adoption on Earnings Management Activities and Value Relevance of Accounting Information: Applied Study

2018 ◽  
Vol 1 (3) ◽  
pp. 11-42
Author(s):  
Mohamed Ibrahim Mohamed Hessian
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Value Relevance ◽  
Accounting Information ◽  
Discretionary Accruals ◽  
Economic Benefits ◽  
Financial Reporting Standards ◽  
Study Results ◽  
The Impact

This study focused on the economic benefits of adoption of IFRS. More specifically, this study emphasis on whether the quality of the accounting information has been improved after the adoption of IFRS. The study investigated quality of accounting information through two main variables: earnings management and the value relevance of accounting information. The study was applied on 56 Egyptian listed companies during the period from 1997 to 2011, which divided into two periods: the period after the adoption of the standards from 2007 to 2011, and before the adoption of the International Financial Reporting Standards from 1997 to 2006. The research concluded that there is a significant impact of the adoption of IFRS on managerial opportunities to manage earnings using discretionary accruals, which is reflected in the lower value relevance of accounting information. Study results also indicate that companies with high leverage are the lowest companies in the value relevance of accounting information, and that companies that are subject to private sector law No. 159 of 1981 are the most companies engaged in earnings management activities through discretionary accruals, large size companies, without any significant impact on future growth opportunities and listing on global exchanges.

scholarly journals Presentation Pattern and the Value Relevance of Comprehensive Income --- Evidence from China

2017 ◽  
Vol 9 (6) ◽  
pp. 31 ◽  
Author(s):  
Wenjing Xu ◽  
Ming Qi
Keyword(s):  
Financial Reporting ◽  
Information Disclosure ◽  
Value Relevance ◽  
Accounting Standards ◽  
Accounting Standard ◽  
Financial Reporting Standards ◽  
Comprehensive Income ◽  
Other Comprehensive Income ◽  
The Impact

In 2006 the Chinese Ministry of finance(CMF) issued new accounting standards that required companies began to present comprehensive income information in the statement of equity. In 2009 and 2014, CMF changed the comprehensive income presentation pattern consecutively twice, from the equity statement pattern to the performance statement transition pattern, and then to the single performance statement. The purpose of these changes is to harmonize China Accounting Standard (CAS) with International Financial Reporting Standards(IFRS). It also aims to enhance the usefulness of comprehensive income information by improving the transparency of information disclosure. From the perspective of presentation patterns, the paper examines the influence of presentation pattern changes on the value relevance of comprehensive income (CI), and on other comprehensive income (OCI). The results show that, under the equity statement pattern, neither CI nor OCI was correlated with value. Under the performance statement transition pattern, both CI and OCI have the value relevance. Under the single performance statement pattern, the CI has higher value relevance, while the OCI does not reflect higher value relevance. This study reveals the impact of comprehensive income presentation pattern on the usefulness of decision making. It has certain inspiration and reference for improving the quality of accounting standards and financial reporting.

Voluntary IFRS Adoption by Unlisted European Firms: Impact on Earnings Quality and Cost of Debt

2020 ◽  
Vol 55 (03) ◽  
pp. 2050013
Author(s):  
Mara Cameran ◽  
Domenico Campa
Keyword(s):  
Financial Reporting ◽  
Positive Impact ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Cost Of Debt ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
The Cost ◽  
The Impact ◽  
Unlisted Firms

This paper investigates the impact of the voluntary adoption of International Financial Reporting Standards (IFRS) by unlisted firms on both their financial reporting quality and cost of debt. Using a large international sample of unlisted EU companies for which the choice of IFRS is voluntary, we find that IFRS adoption has a positive impact on financial reporting quality and results in a decrease in the cost of debt. In addition, unlisted firms adopting IFRS are more likely to be acquired or go public in the years subsequent to the adoption, relative to other unlisted firms. We document a tangible benefit of voluntary IFRS adoption by unlisted firms.

scholarly journals Institutional pressures, legitimacy, risks, uncertainty and voluntary adoption of IFRS for SMEs in Vietnam

2021 ◽  
Vol 8 (4) ◽  
pp. 495-510
Author(s):  
Trinh Hiep Thien ◽  
Nguyen Xuan Hung
Keyword(s):  
Financial Reporting ◽  
Quantitative Research ◽  
Financial Risk ◽  
Negative Impact ◽  
Positive Impact ◽  
International Financial Reporting Standards ◽  
Institutional Pressures ◽  
Reporting Standards ◽  
Financial Reporting Standards ◽  
The Impact

The purpose of this study was to determine the impact of institutional variables, risks, and dependence on the voluntary application of international financial reporting standards. The study used a quantitative research method based on regression analysis, with data obtained from a survey from among Vietnam's small and medium businesses. The findings confirmed that legitimacy, dependence, consistency, time, international trade, uncertainty, operational risk, financial risk, and industry all have a positive impact on the ability to voluntary application international financial reporting standards, with the exception of flexibility, which has a negative impact. The findings of the study have consequences for stakeholders in making proper policy decisions about the application of the International Financial Reporting Standards.

scholarly journals Value Relevance of Intangible Assets Before and After FRS 138 Adoptions: Evidence From Malaysia

2019 ◽  
Vol 10 (3) ◽  
pp. 267
Author(s):  
Nik Azmiah Binti Nik Azin ◽  
Norhayati Bt Alias
Keyword(s):  
Financial Reporting ◽  
Intangible Assets ◽  
Value Relevance ◽  
Economic Consequences ◽  
High Tech ◽  
Intangible Asset ◽  
Financial Reporting Standards ◽  
Tangible Assets ◽  
Before And After ◽  
The Impact

The economic environment has changed from the era of agriculture, industrial and now to an information era. In this information era, intangible assets dominate the environment compared to during industrial era that was mainly dominated by tangible assets. Intangible asset plays an important role in today’s economy with the shift from being an industrialised economy to a high-tech and service-oriented. In Malaysian capital market, there is an upward trend of intangible assets development. Hence, the question of whether the value relevance of intangible assets is properly reflected in financial statements arises. The objective of this study is to examine the value relevance of intangible assets in Malaysia before and after the adoption of FRS 138. This study used a sample of 113 public listed companies from four main sectors namely Industrial Product, Trading services, Consumer Product and Technology. The period under study was divided into two, that is, pre adoption period (2002-2005) and post adoption period (2008-2011) to observe if there were any improvements on the value relevance of intangible assets after the adoption of International Financial Reporting Standards (IFRS). The data was analysed to examine the value relevance of intangible assets in Malaysia before and after the adoption of FRS 138. The finding of this study suggests that intangible assets are value relevant in the pre adoption period but are not value relevant in the post adoption period. This study may contribute to the existing literature on the economic consequences of adopting IFRS and also preliminary indication of the impact of FRS 138 adoption.

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