Download or read book Does Mandatory IFRS Adoption Improve Information Quality in Low Investor Protection Countries written by Noor Houqe and published by . This book was released on 2017 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: We empirically examine the effect of IFRS adoption on the information quality of financial reporting in low investor protection countries. We examine the capital markets of France, Switzerland and Sweden, three Western European civil law countries, which are regarded as low investor protection, owing primarily to their respective systems of law according to the World Economic Forum's 2011/2012 Global Competitiveness Report. By utilising and analysing data from 2003 and 2011, we find a significant improvement in both forecast accuracy and forecast dispersion following the mandatory adoption of IFRS in all three of the countries sampled, confirming our hypotheses. These results are robust to an increase in sample size as well as the removal of financial companies from the primary sample. These results suggest that the mandatory adoption of IFRS in low investor protection countries will lead to an improvement in information quality and international comparability.

Download or read book Does IFRS increase transparency and consequently increase investor protection written by Christoph Sindezingue and published by GRIN Verlag. This book was released on 2011 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Studienarbeit aus dem Jahr 2010 im Fachbereich BWL - Investition und Finanzierung, Note: 70/100, Durham University (Durham Business School), Veranstaltung: Research Methods, Sprache: Deutsch, Abstract: Since 2005, the disclosure of consolidated financial statements according to IFRS has been mandatory for all listed companies in the European Union. IFRS supporters claim that a single accounting standard would increase the level of disclosure and hence, increase transparency and therefore investor protection. This paper strives to determine if IFRS increases investor protection through improvements in reporting transparency. Therefore, this paper focuses on the ability of IFRS to decrease earnings management, the main driver of investor protection. The theoretical rationale gives an overview of earnings management, revealing its popularity among management. However, irrespective of the motivation, earnings management reduces the transparency for the investor and thereby reduces investor protection. The review of empirical evidence reveals that voluntary adoption of IFRS leads to a strong decrease in earnings management and an increase in disclosure quality of financial statements. Indeed, the voluntary adoption is biased because the first-time adopters are convinced that a higher transparency could be used to their own advantage. In contrast, the mandatory adoption is not free of ambiguity, but literature tends to conclude that the forced implementation of IFRS leads neither to a reduction of earnings management nor to a higher level of disclosure. Consequently, a mandatory IFRS adoption does not necessarily increase investor protection.

Download or read book The Impact of Legal and Voluntary Investor Protection on the Early Adoption of IFRS written by Annelies Renders and published by . This book was released on 2005 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: Previous studies (Dumontier and Raffournier, 1998, El-Gazzar et al, 1999; Cuijpers and Buijink, 2004) typically explain the early adoption of IFRS by firm-specific benefits. However, the adoption of IFRS also leads to costs for company insiders, namely less managerial discretion and as a consequence smaller private benefits due to increased disclosure requirements and less accounting method choices. This paper argues that the cost of adopting IFRS depends on characteristics of the institutional environment, more specifically the level of investor protection.Using a sample of European companies, we find that IFRS is more likely adopted in countries with strong laws protecting investors and/or extensive corporate governance recommendations where the loss of private benefits following IFRS-adoption is lower. Furthermore, the results show that corporate governance recommendations are as effective as hard laws in stimulating IFRS-adoption and that their impact increases as laws become weaker. This suggests that by improving corporate governance codes, countries can easily reduce the extraction of private benefits by managers and enhance the quality of the financial information. However, when looking at specific recommendations and laws, we find that shareholder rights with regard to voting rights and the general meeting need to be regulated by law in order to effectively reduce the level of private benefits.

Download or read book Mandatory Adoption of IFRS in Latin America written by André Aroldo Freitas De Moura and published by . This book was released on 2019 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: Exploiting the unique feature that Latin American countries have not undergone a significant change to the enforcement of accounting standards and investor protection mechanisms, we investigate whether mandatory adoption of IFRS and firm-level reporting incentives improve analysts' information environment in Latin American countries (Argentina, Brazil, Chile, Mexico and Peru), and whether the precision of public, private and consensus information improve after IFRS adoption. The results show that mandatory adoption of IFRS and firm-level reporting incentives improve analysts' information environment. Overall, we confirm the positive effects of IFRS adoption, because the precision of public and consensus information is enhanced.

Download or read book Earnings Management Motives and Firm Value Following Mandatory IFRS Adoption Evidence from Canadian Companies written by Raymond Leung and published by . This book was released on 2015 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: When Canada already has a set of well- established legal enforcement and investor protection mechanism to control earnings management; and the quality of Canadian GAAP is high, I examine if the accounting quality for Canada can still be improved since its adoption of IFRS mandatorily in 2011. The extant literature argues that IFRS adoption benefits firms domiciled in countries with strong legal and financial institutions. However, when the quality of IFRS is as good as the local standards for many Anglo-Saxon countries such as Canada, it is questionable if these countries can still receive substantial economic consequences. Following the literature, I estimate a set of comprehensive measurements of earnings management as the proxies of accounting quality. Empirically, I document evidence that the results are mixed: while discretionary accruals have been improved, but not for Manage Earnings Towards Target (METT) and Timely Loss Recognition. Besides accounting standards, I also find that firms issuing more equities are motivated to associate with lower earnings quality. In addition, firms engaging in two distinct strategic directions (prospector vs. defender) have systemically dissimilar effects on earnings quality in IFRS adoption. Finally, I document evidence that firm value following IFRS adoption has been increased, but at the expense of lower accounting quality. Overall, my study shed some lights into the literature that accounting standards per se implemented in strong institutional setting is not sufficient to ensure a higher level of accounting quality; and firm-level earnings management motives are important factors too.

Download or read book The Future of IFRS written by ICAEW Financial Reporting Faculty and published by . This book was released on 2012 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Does Mandatory Adoption of IFRS Have Similar Economic Consequences Across Country Classification A Cross Sample Comparison of Developed Versus Developing Countries written by Solomon George Zori and published by . This book was released on 2019 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the economic consequences of mandatory International Financial Reporting Standards (IFRS) adoption from firm and country level perspective, and across country classification (developing vs. developed economy). Using a global sample of firms from 59 countries spanning from 1993-2016, and applying difference-in-differences design, we analyze the induced changes in the cost of equity/debt capital following IFRS adoption. We find that mandatory adopters in developing countries are more likely to experience significant decreases in the cost of capital in the post-adoption period than firms in developed countries. Furthermore, we find that this is also the case if the firms are located in countries that exhibit low governance quality. In developed countries, IFRS adoption seems most beneficial to firms which are located in strong shareholder protection regimes, whereas high governance quality does not show positive effects. On country level, however, we do not find evidence that mandatory IFRS adopters experience a decrease in the cost of debt in the post adoption period, neither for developing nor for developed countries. Overall, our findings suggest positive economic consequences of mandatory IFRS adoption for firms in developing countries, even if these countries exhibit weaknesses in institutional settings.

Download or read book Changes in Value Relevance of Financial Information Upon IFRS Adoption written by Keryn Chalmers and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate whether the adoption of IFRS increases the value relevance of accounting information for firms listed on the Australian Securities Exchange. Using a longitudinal study that covers pre-IFRS and post-IFRS periods during 1990-2008, we find that the combined relevance of book value of equity and earnings alters little with IFRS adoption. However, earnings become more value relevant whereas the book value of equity does not. This impact is concentrated in the sub-samples of large firms and firms that reported accounting information differences upon IFRS adoption. Consistent with an increase in the value relevance of earnings, earnings also become more persistent around IFRS adoption. Our study suggests that even for a country categorised by strong investor protection and high quality financial reporting and enforcement, IFRS adoption affects the associations between accounting information and market value.

Download or read book The introduction of IFRS Consequences for investment decisions written by Simon Falcke and published by GRIN Verlag. This book was released on 2020-07-09 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2019 in the subject Business economics - Investment and Finance, grade: 1,0, Otto Beisheim School of Management Vallendar, language: English, abstract: Starting in 2005, the portion of foreign shareholders in the Dax has risen from 45% to 58% in the last decade. In the same year, the regulation of the European Union from 2002 came into effect which required all listed firms in the European Union to report their consolidated accounts in accordance with the International Financial Reporting Standard (IFRS) from 2005 on instead of each countries’ generally accepted accounting standards (GAAP). This is just one example where the volume of investments increased concurrently with the adoption of IFRS. Therefore, the question arises if the mandatory adoption of IFRS in the EU in 2005 or in other cases significantly affected and continues to affect investment decisions among adopters or third parties. In order to better account for differences between different types of investors and investees, we differentiate between retail investors, institutional investors and corporate finance activities. Moreover, we focus on the consequence of IFRS adoption on equity investment decisions as most research appears to focus on the equity instead of the credit market. Additionally, Lourenco & Branco point out that most research which finds no significant effects of IFRS adoption on investment decisions appears to focus on voluntary adoption before 2005. Thus, this paper mainly focuses on mandatory IFRS adoption. In this context, research suggests that mandatory IFRS adopters experience significant capital markets benefits as well as enhanced foreign institutional ownership and enhanced M&A activity. Ultimately, we observe four overarching drivers behind the aforementioned observations that impact investment decisions across different types of investors and investees.

Download or read book Financial Information Globalization and Foreign Investment Decisions written by Dan Amiram and published by . This book was released on 2014 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the association between the adoption of international accounting standards and foreign investment decisions. Prior research suggests that information asymmetries between local and foreign investors and behavioral biases caused by unfamiliarity of the foreign markets contribute to investors preferring to invest in their home markets. Because one of the goals of the adoption of international accounting standards is to establish a high quality, internationally familiar set of accounting standards, I predict that foreign investments will increase in countries that adopted International Financial Reporting Standards (IFRS) after the adoption and that this increase is driven by the familiarity of IFRS. I find that foreign equity portfolio investments (FPI) increase in countries that adopt IFRS. More importantly, I find that this relation is driven by foreign investors from countries that also use IFRS. Moreover, the effect of accounting familiarity is more pronounced when investor and investee countries share language, legal origin, culture, and region. I also find that countries with lower corruption and better investor protection experience larger increases in FPI after they adopt IFRS relative to other IFRS users. These findings are consistent with the hypothesis that familiar accounting information drives foreign investment decisions.

Download or read book Does Mandatory IFRS Adoption Improve the Information Environment written by Joanne Horton and published by . This book was released on 2013 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: More than 120 countries require or permit the use of International Financial Reporting Standards (lsquo;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 are often conflicting and fail to separate 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 errors 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.

Download or read book The Future Battlefield and the Arab Israeli Conflict written by Hirsh Goodman and published by Transaction Publishers. This book was released on with total page 236 pages. Available in PDF, EPUB and Kindle. Book excerpt: The revolution now taking place in the technology of war is one with potentially dramatic implications for the Arab-Israeli military balance. In this important book, two Middle East military experts assess the impact of technological innovation on Israeli and Arab military forces. They concentrate primarily on Israel and Syria, since Syria remains intent on achieving strategic parity with Israel while other Arab countries are less inclined to become militarily involved. The authors outline a number of developments and their consequences. These include the proliferation of military technologies, which make available types of equipment previously unattainable, and the electronics revolution, which permits acquisition of vastly more sophisticated command, control, communications, and intelligence systems. New weapons systems - long range artillery rockets, ballistic and cruise missiles, and strike drones - permit attacks deep in enemy territory. Goodman and Cams see all these changes as a mixed blessing for Israel and Syria. In both countries, human resources will be tested by the need to develop, use, and maintain such highly sophisticated equipment. Similarly, the cost of such sophisticated hardware will strain the financial resources of both countries. The authors' assessment of the impact of changes on the future battlefield has applications beyond the Arab-Israeli conflict. In such countries, the importance of a domestic weapons industry will be heightened as reliance on foreign sources becomes less attractive, for reasons the authors discuss. Reliance on good tactics and operational methods will remain keys to success. But in all cases, the benefits of the new technologies will depend on the relative skill with which countries can use them. Between Israel and Syria, the authors see the advantage as Israel's. "The Future Battlefield and the Arab-Israeli Conflict "will be of interest to military and strategic specialists, political scientists concerned with international relations, Middle East specialists, and those interested in the impact of scientific and technological change on policy. This volume is the first in a series developed with the Washington Institute for Near East Studies.

Download or read book Project Evaluation Techniques for Entrepreneurs written by Florencia Roca and published by Createspace Independent Publishing Platform. This book was released on 2016-12-21 with total page 384 pages. Available in PDF, EPUB and Kindle. Book excerpt: A guide for the appraisal of projects from the financial point of view. A book ready to be applied, rich in examples; prepared by financial consultants and professors. The book includes links to download all the Excel spreadsheets, as well as explanation videos recorded by the authors. Facebook page: www.facebook.com/project.evaluation

Download or read book Economics and Political Implications of International Financial Reporting Standards written by Uchenna, Efobi and published by IGI Global. This book was released on 2016-03-08 with total page 434 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book The German Financial System written by Jan Pieter Krahmen (editor) and published by . This book was released on 2004 with total page 550 pages. Available in PDF, EPUB and Kindle. Book excerpt: Written by a team of scholars, predominantly from the Centre for Financial Studies in Frankfurt, this volume provides a descriptive survey of the present state of the German financial system and a new analytical framework to explain its workings.

Download or read book Information Frictions and Investor Home Bias written by Messod D. Beneish and published by . This book was released on 2014 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides a perspective on the effect of IFRS adoption on the tendency of investors to under-invest in foreign equities. We consider explanations for the home equity bias described in prior research and discuss research relevant to the informational consequences of global adoption of IFRS. Specifically, we evaluate whether IFRS adoption reduces information processing costs or decreases investor uncertainty about either the quality of financial reporting or the distribution of future cash flows. We predict that the effect of any reduction in information processing costs from the adoption of IFRS is likely to be small relative to the effects of other determinants of home bias such as the strength of investor protection mechanisms in foreign countries, behavioral biases toward familiar equities, and informational advantages related to geographical proximity. We conclude that global IFRS adoption is unlikely to reduce home bias and propose avenues for future research.

Download or read book The world price of earnings opacity written by Uptal Bhattacharya and published by . This book was released on 2002 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: