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Has the introduction of IFRS improved accounting quality? A comparative study of five countries
Linnaeus University, Faculty of Business, Economics and Design, Linnaeus School of Business and Economics. (Corporate governance)ORCID iD: 0000-0001-6123-7886
Linnaeus University, Faculty of Business, Economics and Design, Linnaeus School of Business and Economics. (Corporate governance)
Linnaeus University, Faculty of Business, Economics and Design, Linnaeus School of Business and Economics. (Corporate governance)
2012 (English)Conference paper, (Refereed)
Abstract [en]

This paper investigates whether the implementation of International Financial Reporting Standards (IFRS) has increased accounting quality. Previous research has primarily explored the effects of IFRS on accounting quality as measured through the use of value relevance, timely loss recognition and earnings management. In contrast, this paper employs a measure of accounting quality that is based on the use of accounting information, namely, the performance of financial analysts. The sample encompasses nearly 2,500 publicly traded firms, all followed by analysts, from 1996-2009. The sample covers five European countries (Sweden, Netherlands, France, Germany and the United Kingdom (the UK)), each with different legal and accounting traditions. We use quantile regressions to estimate the impact of IFRS while simultaneously considering that most prediction errors are small and are most likely random and unaffected by the accounting standard being followed. Our results suggest that IFRS have had no effect on analysts’ average ability to accurately forecast firms’ earnings per share. In all countries except the UK, IFRS have led to higher consistency in analyst forecasts. The impact of IFRS is not more pronounced in firms that are more affected by their asset measurement methods. The results suggest that in countries where prior GAAP differ from IFRS, IFRS may have the effect of presenting more consistent but not more accurate pictures of firms for analysts.

Place, publisher, year, edition, pages
2012.
National Category
Business Administration
Identifiers
URN: urn:nbn:se:lnu:diva-22874OAI: oai:DiVA.org:lnu-22874DiVA: diva2:576815
Conference
35th Annual Congress of the European Accounting Association, Ljubljana, May 9-11, 2012.
Available from: 2012-12-13 Created: 2012-12-13 Last updated: 2016-05-03Bibliographically approved

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Jansson, AndreasJönsson, Micaelvon Koch, Christopher
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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf