The Effect of International Financial Reporting Standards (IFRS) Adoption on the Value Relevance of Financial Reporting
The Effect of International Financial Reporting Standards (IFRS) Adoption on the Value Relevance of Financial Reporting

Author: Tatiana Garanina

Publisher:

Published: 2019

Total Pages: 31

ISBN-13:

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Purpose - The purpose of this study is to empirically examine the influence of International Financial Reporting Standards (IFRS) adoption by Russian public companies on the value relevance of financial reporting in Russia.Design/methodology/approach - We selected 67 Russian public companies that report both under RAS and IFRS for four consecutive years (2006 - 2009). Research limitations - The main limitation of the paper is the sample, but this can be explained by the fact that only 67 companies in Russia report under two standards (RAS and IFRS). So the sample could not be increased as there are no other companies that fulfill the characteristics of the sample.Findings - The obtained results show that on the Russian market there is no evidence of increased value relevance of financial reporting to external users of financial information after adopting IFRS when comparing and evaluating the two regimes (RAS and IFRS) unconditionally. Such results can be explained by the notion of mock compliance which originates due to the institutional differences between the RAS and IFRS development environments.Originality/value - Adoption of IFRS by companies in emerging markets has been a subject of interest for a lot of researchers, but this is the first research of the kind in the field of value relevance of adoption of IFRS on the Russian market.

Effects of International Financial Reporting Standard (IFRS) on Value Relevance of Accounting Information
Effects of International Financial Reporting Standard (IFRS) on Value Relevance of Accounting Information

Author: Osamwonyi Ohonba

Publisher:

Published: 2019

Total Pages: 57

ISBN-13:

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The broad objective of this research was to empirically examine the effect of IFRS on value relevance of accounting information. This study employs a longitudinal panel research design. The population of this study covers all quoted banks listed on the Nigerian Stock Exchange. As at the study period, there were only 15 quoted banks on the Nigerian Stock Exchange and this also forms the sample for the study. Secondary data was been used for this study. The data was retrieved from corporate annual reports of the sampled banks for 2010-2017 financial years. The researcher utilizes only corporate annual reports because they are readily available, accessible and also provides a greater potential for comparability of results. More so, they are produced annually and kept in public sphere. The Ordinary least square regression (OLS) was used for the data analysis. The study findings revealed that while IFRS adoption has a statistically significant influence on Earnings per share and Dividend per share value relevance; it has no statistically significant influence on Book value per share value relevance. The study recommends that investors and indeed users of accounting information should still be confident in relying on accounting information prepared by corporate entities in making investment decisions. The study recommends that there is need for companies to comply fully with all IFRS standards in the preparation of financial reports since IFRS adoption was found to have positive effects on value relevance.

Accounting in Central and Eastern Europe
Accounting in Central and Eastern Europe

Author: Catalin Albu

Publisher: Emerald Group Publishing

Published: 2013-12-05

Total Pages: 358

ISBN-13:

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Countries in Central and Eastern Europe (CEE), most of them former components of the communist bloc, have suffered diverse influences over time. Historically, the advent of communism in the 1950s has stopped the economic and political development of these countries. Its fall during the late 1980s and early 1990s triggered severe changes in the economic and social environment, with profound consequences on the countries' accounting and business models. The accounting regulatory process of these countries has mostly been a public one, although some countries also involved private sector and professional bodies. With economic and political reforms these countries are now reforming their accounting systems with for example the adoption of International Accounting Standards/International Financial Reporting Standards (IFRS). Additionally, the CEE countries' political will to join the European Union compelled the regulators to ensure a high level of harmonization with the European Directives. This volume present theoretical and empirical papers that will further our understanding of accounting issues in CEE countries.

Adoption of IFRS in the Netherlands. Impact on value relevance
Adoption of IFRS in the Netherlands. Impact on value relevance

Author: Alfred Mully

Publisher: GRIN Verlag

Published: 2014-03-03

Total Pages: 52

ISBN-13: 3656605963

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Masterarbeit aus dem Jahr 2007 im Fachbereich BWL - Bank, Börse, Versicherung, , Sprache: Deutsch, Abstract: Listed Dutch firms are required by law to prepare their financial statements in accordance with the International financial Statements (IFRS) since 2005. Before 2005, listed Dutch firms prepared their financial statements using Dutch law, Title 9 of book two of the Dutch Civil Code. It is interesting to investigate the effect of the implementation of IFRS. Is the quality of the financial statements improved by the implementation of IFRS for the users of the financial statements, such as investors, suppliers and banks? This question can be answered in many ways, looking at different characteristics of the accounting information, for example the comparability, the relevance, the reliability and the understandability. In this thesis the relevance will be studied. Information has the quality of relevance when it influences the economic decisions of users by helping them evaluate past, present or future events or conforming, or correcting, their past evaluations. (IFRS Handbook, 2007, p. 40) In order to be relevant the accounting information must reflect the information needs of the users in valuing a company. In order to determine the market price of a company, investors need accounting information that reflects the share price of a company. The research done studying the relevance of accounting information for valuating companies is called value-relevance research. The implementation of IFRS had consequences for the value-relevance of the accounting information. Whether the value-relevance had improved by the adoption of IFRS is dependent on the differences between the former accounting system and IFRS. The impact on value relevance in the Netherlands has not been studied yet. The impact on value-relevance in other countries has been studied however, for example in the United Kingdom (Harris and Muller, 1999), Germany (Hung and Subramanyam, 2007) and Spain Callao et al. (2007). These studies can give a powerful insight in how the difference in value-relevance of two accounting systems can be studied.

IFRS Adoption and Financial Reporting Quality
IFRS Adoption and Financial Reporting Quality

Author: Habeeb Mohamed Nijam

Publisher:

Published: 2016

Total Pages: 14

ISBN-13:

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Conventional and commonly held wisdom with respect to the adoption of International Financial Reporting Standards (IFRS) is that they lead to improved financial reporting quality and comparability and thereby favorable economic consequences. There are however contradicting evidences disproving this conventional wisdom or rejecting its gross generalization over the entire jurisdictions harmonizing on IFRS. Driven by this fact, quests for knowledge about the dynamics and contexts that lead to differential effects of IFRS get momentum. In an attempt to explore the insight into the effects of international accounting harmonization by way of IFRS adoption, this paper reviews selected literatures on consequences of IFRS adoption. This review discusses some empirical evidences that have been reported in various countries that include Europe, USA, United Kingdom, Germany, Spain, Norway, Greece, Poland, Belgian, France, Italy, Turkey, United Arab Emirates (UAE), Kuwait, Jordan, China, Malaysia, Australia, Hong Kong, New Zealand, Kenya and Nigeria. Our review focuses on the aspects of value relevance, disclosure quality, cost of capital, earning management and financial statement impact due to the IFRS adoption. This review reveals that economic consequences of IFRS adoption significantly differ across jurisdictions though being its impact reported to be positive in majority of cases. There are also notable number of studies that report indifferent and or negative effects of IFRS adoption. When IFRS studies report mixed evidence with respect to value relevance of book value of equity and earing, book value of equity supersedes the earning parameters. IFRS are found to supersede many other domestic financial reporting standards in terms of volume and quality of disclosures in financial statements. This review also obtains that IFRS' impact on the reduction of cost of capital depends on financial reporting incentives, law enforcement, types of legal systems and various other country and capital market specific characteristics. Further, though there are some evidences to the contrary, the quality of earnings reported under IFRS has been established to be superior to that under other local standards.

An Empirical Analysis of the Impact of Adopting International Financial Reporting Standards
An Empirical Analysis of the Impact of Adopting International Financial Reporting Standards

Author: Mohamed H. Warsame

Publisher:

Published: 2006

Total Pages: 322

ISBN-13:

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This study examines the impact of adopting International Financial Reporting Standards (IFRS) and the prior and superseded International Accounting Standards (IAS) on investor returns, the level of earnings management and the value relevance of accounting information in African capital markets. This study is motivated by the growing momentum of African countries adopting International Financial Reporting Standards (IFRS) for listed, cross listed or even unlisted companies. Prior to the adoption of IFRS, a high level of diversity existed in accounting standards between African countries. These differences consisted of the number of promulgated standards, conservatism of these standards, their completeness for potential accounting transactions, depth and guidelines on allowable measurement methods and disclosure requirements. First, this study empirically examines whether IFRS adoption has impacted investor returns through the informativeness of reported earnings and secondly, whether the level of discretionary earnings management as determined by several models and proxies has declined from the IFRS adoption. Thirdly, this study examines the changes in value relevance of accounting information from the migration to IFRS. This study finds significantly higher informativeness of reported earnings under IFRS for investor returns compared to earnings per share (EPS) reporting under local GAAP after controlling for confounding factors. This provides evidence for the valuation impact of IFRS adoption. Furthermore, this study finds evidence of significantly lower earnings management by firms using IFRS compared to firms utilizing local GAAP's. This lower earnings management by IFRS reporting firms is observed for both the use of discretionary accruals to manage earnings upwards and earnings smoothing. On the value relevance of financial statements, this study first, finds that accounting reports are value relevant in all African markets examined. In addition, IFRS adopted countries and those harmonizing closely with IFRS are found to have the highest value relevance. Furthermore, test of difference in value relevance in South Africa between IFRS and South African GAAP reporting firms shows significantly higher value relevance for IFRS accounting information. -- Abstract.

Economics and Political Implications of International Financial Reporting Standards
Economics and Political Implications of International Financial Reporting Standards

Author: Uchenna, Efobi

Publisher: IGI Global

Published: 2016-03-08

Total Pages: 434

ISBN-13: 1466698772

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International Financial Reporting Standards (IFRS) are internationally-recognized financial reporting guidelines regulated by the International Accounting Standards Board (IASB) to ensure that uniformity exists in the global financial system. In addition to regulating financial reporting, the adoption of IRFS has been shown to impact the flow of foreign capital and trade. Economics and Political Implications of International Financial Reporting Standards focuses on the consequences and determinants of the adoption of the International Financial Reporting Standard (IFRS), which has remained a top issue in International Accounting. This timely publication brings to the forefront issues related to the political and economic influences and impacts of IFRS in addition to providing a platform for further research in this area. Policy makers, academics, researchers, graduate-level students, and professionals across the fields of management, economics, finance, international relations, and political science will find this publication pertinent to furthering their understanding of financial reporting at the global level.

Effects of Adoption of International Financial Reporting Standards
Effects of Adoption of International Financial Reporting Standards

Author: Wai Ling Yap

Publisher:

Published: 2007

Total Pages: 180

ISBN-13:

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International Financial Reporting Standards (IFRS) is said to produce higher quality accounting information, greater comparability of accounts, greater consistency of accounting processes, greater transparency between firms and lower costs of capital. However, there are arguments against the adoption of IFRS. The first objective of this study is to examine the accounting quality of IFRS earnings and equity, compared to the accounting quality of earnings and equity prepared under previous standards; that is GAAP (Generally Accepted Accounting Principles) for United Kingdom, Hong Kong, and Singapore firms. The second objective is to investigate the effect of IFRS on the accounts (earnings and equity) of the average listed firm in United Kingdom, Hong Kong and Singapore. These three countries are chosen because of their comparable historical Anglo-accounting system roots, but deviations in approaches during the accounting standards harmonization era. This study focuses on the initial adoption of IFRS, which is the most appropriate time to measure and fully capture the impact of the changes of accounting standards from GAAP to IFRS. The reason for this is because IFRS 1 First Time Adoption of International Financial Accounting Standards states that firms have to show reconciliations between previous GAAP and IFRS on (a) equity at the date of transition and the end of the latest period presented in the entity's most recent annual financial statements under GAAP, and (b) profit or loss of the latest period of the entity's most recent annual financial statements, with supplementary explanations necessary for understanding the transition. The results of this study shows the accounts of United Kingdom firms are most affected by the adoption of IFRSs when compared to Hong Kong and Singapore firms. Results also reveal that there is little evidence to conclude that financial statements prepared under IFRS are more market value relevant than financial statements prepared under GAAP.There is also little evidence to conclude that financial statements prepared under IFRSs are incrementally value relevant relative to financial statements prepared under GAAP. The conclusions are that countries that historically chose their GAAPs on selective IASs prior to the adoption of IFRSs were less affected by adjustments to companies equity and earnings. But these adjustments, even in the less harmonized companies in the United Kingdom, were not value relevant to the equity market.

IFRS in a Global World
IFRS in a Global World

Author: Didier Bensadon

Publisher: Springer

Published: 2016-05-13

Total Pages: 477

ISBN-13: 3319282255

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This book, dedicated to Prof. Jacques Richard, is about the economic, political, social and even environmental consequences of setting accounting standards, with emphasis on those that are alleged to be precipitated by the adoption and implementation of IFRS. The authors offer their reasoned critiques of the effectiveness of IFRS in promoting genuine global comparability of financial reporting. The editors of this collection have invited authors from 17 countries, so that a great variety of accounting, auditing and regulatory cultures, and educational perspectives, is amply on display in their essays.