Does Mandatory IFRS Adoption Improve the Information Environment?*

Contemporary Accounting Research - Tập 30 Số 1 - Trang 388-423 - 2013
Joanne Horton1, George Serafeim2, Ioanna Serafeim3
1University of Exeter,
2Harvard Business School,
3Capital Market Commission (Greece)

Tóm tắt

More than 120 countries require or permit the use of International Financial Reporting Standards (IFRS) by publicly listed companies on the basis of higher information quality and accounting comparability from IFRS application. However, the empirical evidence about these presumed benefits is often conflicting and fails to distinguish between information quality and comparability. In this paper we examine the effect of mandatory IFRS adoption on firms’ information environment. We find that after mandatory IFRS adoption consensus forecast errors decrease for firms that mandatorily adopt IFRS relative to forecast errors of other firms. We also find decreasing forecast errors for voluntary adopters, but this effect is smaller and not robust. Moreover, we show that the magnitude of the forecast error decrease is associated with the firm‐specific differences between local GAAP and IFRS. This finding suggests that it is IFRS adoption rather than a correlated unobservable factor that is causing forecast errors to decrease. Exploiting individual analyst level data and isolating settings where analysts would benefit more from either increased comparability or higher quality information, we document that the improvement in the information environment is driven both by information and comparability effects. These results suggest that mandatory IFRS adoption has improved the quality of information intermediation in capital markets, and as a result firms’ information environment, by increasing both information quality and accounting comparability.

Từ khóa


Tài liệu tham khảo

10.1016/j.jacceco.2003.11.001

Ahmed A. S. M. J.Neel andD.Wang.2010.Does mandatory adoption of IFRS improve accounting quality? Preliminary evidence. Working paper available athttp://ssrn.com/abstract=1502909 retrieved July 26 2011.

10.2308/accr.2010.85.1.31

10.1111/1475-679X.00020

10.1016/j.jaccpubpol.2010.10.001

10.2308/accr.2008.83.3.593

10.1080/00014788.2006.9730040

10.1016/S0165-4101(00)00012-4

10.1016/j.jacceco.2003.10.003

10.1007/BF00245253

10.2308/accr.2002.77.4.821

Barron O., 1998, Using analysts’ forecasts to measure properties of analysts’ information environment, The Accounting Review, 73, 421

10.1111/j.1475-679X.2008.00287.x

Beneish M. D. B. P.Miller andT. L.Yohn.2010.The effect of IFRS adoption on cross‐border investment in equity and debt markets. Working paper Indiana University.

Beuselinck C. P.Joos andS.Van der Meulen.2010.Mandatory adoption of IFRS and analysts’ forecasts information properties. Working paper available athttp://www.feb.ugent.be/nl/ondz/Activ/Kijker/BKJV_Analyst_21Oct2009_CB.pdf retrieved July 26 2011.

Bielstein M. T., 2007, How the IFRS movement will affect financial reporting in the U.S

Botosan C, 1997, Disclosure level and the cost of equity capital, The Accounting Review, 72, 323

10.1111/j.1475-679X.2004.00157.x

Bradshaw M. andG. S.Miller.2007.Will harmonizing accounting standards really harmonize accounting?Evidence from non‐U.S. firms adopting U.S. GAAP. Working paper Harvard Business School.

Bradshaw M. G.Miller andG.Serafeim.2010.Accounting method heterogeneity and analysts’ forecasts. Working paper Harvard Business School.

Brochet F. A.Jagolinzer andE. J.Riedl.2011.Mandatory IFRS adoption and financial statement comparability. Working paper Harvard Business School.

10.1111/j.1475-679X.2010.00390.x

Cascino S. andJ.Gassen.2010.Mandatory IFRS adoption and accounting comparability. Working paper available athttp://ssrn.com/abstract=1402206 retrieved July 26 2011.

10.1111/j.1467-646X.2010.01041.x

Choi F. D. S., 2005, International accounting

Christensen H. E.Lee andM.Walker.2008.Incentives or standards: What determines accounting quality changes around IFRS adoption?Working paper Manchester Business School.

10.1111/j.1475-679X.2009.00345.x

10.1016/S0165-4101(99)00013-0

10.2307/1073083

10.1111/j.1467-629X.2010.00392.x

10.1111/j.1475-679X.2007.00226.x

10.1111/j.1468-5957.2006.00611.x

10.1111/j.1475-679X.2008.00306.x

10.1016/j.jacceco.2011.02.001

10.1016/S0165-4101(02)00098-8

10.1086/209601

10.2308/accr.2002.77.2.415

10.1086/296331

Dye R. A., 1990, Mandatory versus voluntary disclosures: The cases of financial and real externalities, The Accounting Review, 65, 1

10.1007/BF03342701

10.1111/j.1540-6261.1996.tb05202.x

10.1111/j.1540-6261.1980.tb02183.x

10.1111/1475-679X.00007

10.1080/09638180.2011.558301

10.2308/accr.2008.83.1.83

10.1016/S1815-5669(10)70020-5

10.1111/j.1475-679X.2006.00209.x

10.1016/0165-4101(85)90029-1

10.1111/j.1911-3846.1999.tb00592.x

10.1016/j.intaccaudtax.2008.01.002

10.1111/1475-679X.00102

10.1007/s11142-009-9108-5

10.1506/6QUR-CR5M-AQQX-KX1A

10.1016/j.jaccpubpol.2008.09.008

Kim Y. andS.Li.2010.Mandatory IFRS adoption and intra‐industry information transfers. Working paper Santa Clara University.

10.1080/00014788.2010.9663390

10.1111/j.1475-679X.2007.00238.x

10.1016/j.jacceco.2011.04.002

10.1111/1475-679X.00106

Lang M., 1996, Corporate disclosure policy and analyst behavior, The Accounting Review, 71, 467

Lang M. M.Maffett andE.Owens.2010.Earnings co‐movement and accounting comparability: The effects of mandatory IFRS adoption. Working paper University of North Carolina.

10.1016/j.jacceco.2006.04.005

Leuz C, 2003, IAS versus U.S. GAAP: Information‐asymmetry based evidence from Germany’s new market, Journal of Accounting Research, 41, 445, 10.1111/1475-679X.00112

10.2307/2672910

Leuz C. andP.Wysocki.2008.Economic consequences of financial reporting and disclosure regulation: A review and suggestions for future research. Working paper University of Chicago.

10.2308/accr.2002.77.3.483

10.1016/j.jacceco.2010.10.005

Paananen M.2008.Fair value accounting for goodwill under IFRS: An exploratory study of the comparability in France Germany and the United Kingdom. Working paper available athttp://ssrn.com/abstract=1275803 retrieved July 26 2011.

Paananen M. andC.Lin.2007.The development of accounting quality of IAS and IFRS over time: The case of Germany. Working paper available athttp://ssrn.com/abstract=1066604 retrieved July 26 2011.

Preiato J. P.Brown andA.Tarca.2009.Mandatory IFRS and properties of analysts’ forecasts: How much does enforcement matter?Working paper University of Western Australia.

Quigley J.2007.Deloitte and Touche World meeting Berlin Germany. Retrieved June 10 2012 fromhttp://www.iasplus.com/en/binary/resource/0706quigley.pdf.

10.1111/1475-679X.t01-1-00057

10.1080/0963818042000338013

10.1080/09638180701706732

10.1111/j.1475-679X.2011.00422.x

Wang X. G.Young andZ.Zhuang.2008.The effects of mandatory adoption of International Financial Reporting Standards on information environments. Paper presented at the American Accounting Association meeting Chicago IL.

10.1111/j.1911-3846.1995.tb00467.x

Yu G.2010.Accounting standards and international portfolio holdings: Analysis of cross‐border holdings following mandatory adoption of IFRS. Working paper available athttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1430589 retrieved July 26 2011.