Download or read book Essays on the Economic Consequences of Mandatory IFRS Reporting around the world written by Ulf Brüggemann and published by Springer Science & Business Media. This book was released on 2011-08-31 with total page 162 pages. Available in PDF, EPUB and Kindle. Book excerpt: Ulf Brüggemann discusses and empirically investigates the economic consequences of mandatory switch to IFRS. He provides evidence that cross-border investments by individual investors increased following the introduction of IFRS.
Download or read book Mandatory IFRS Reporting Around the World written by Holger Daske and published by . This book was released on 2011 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the economic consequences of mandatory IFRS reporting around the world. We analyze the effects on market liquidity, cost of capital and Tobin's q in 26 countries using a large sample of firms that are mandated to adopt IFRS. We find that, on average, market liquidity increases around the time of the introduction of IFRS. We also document a decrease in firms' cost of capital and an increase in equity valuations, but only if we account for the possibility that the effects occur prior to the official adoption date. Partitioning our sample, we find that the capital-market benefits occur only in countries where firms have incentives to be transparent and where legal enforcement is strong, underscoring the central importance of firms' reporting incentives and countries' enforcement regimes for the quality of financial reporting. Comparing mandatory and voluntary adopters, we find that the capital market effects are most pronounced for firms that voluntarily switch to IFRS, both in the year when they switch and again later, when IFRS become mandatory. While the former result is likely due to self-selection, the latter result cautions us to attribute the capital-market effects for mandatory adopters solely or even primarily to the IFRS mandate. Many adopting countries have made concurrent efforts to improve enforcement and governance regimes, which likely play into our findings. Consistent with this interpretation, the estimated liquidity improvements are smaller in magnitude when we analyze them on a monthly basis, which is more likely to isolate IFRS reporting effects.
Download or read book Three Essays on the Effects of the Simultaneous Adoption of IFRS International Financial Reporting Standards and MAD Market Abuse Directive in Europe written by Fatima Baalbaki Shibly and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: While prior research on mandatory IFRS adoption fails to provide evidence of improvement in the quality of financial reporting (increased transparency and/or comparability), it provides almost unanimous evidence of beneficial capital-market impacts. Within the European Union (EU), mandatory IFRS adoption coincides with the adoption of the Market Abuse Directive (MAD). While the mandatory adoption of IFRS took place in 2005, MAD was passed between 2004 and 2007 depending on the EU country under consideration. Furthermore, both IFRS and MAD aim towards increased transparency, either by improving the quality of financial reporting (IFRS) or by prohibiting selective disclosures to enhance common information available to all market participants (MAD). Our first essay aims to disentangle the respective market impacts of MAD adoption and IFRS adoption in order to determine the specific effect of each regulation. Our evidence suggests that a significant part of the capital market effects usually attributed to IFRS comes, at least to some extent, from the contemporaneous adoption of the Market Abuse Directive. Our second essay focuses on the role of information environment. Investigating how information environment affects the market impacts of both MAD adoption and IFRS adoption is crucial to determine whether all firms benefit identically from these regulations. Using firm size and analyst following as proxies capturing firms' information environment, we provide evidence showing that small firms and firms with weak analyst following are those that benefit the most from the introduction of the IFRS mandate. In contrast, large firms and firms with high analyst coverage benefit the most from MAD adoption. Our third essay analyzes the role of enforcement. We find that the effectiveness of both IFRS and MAD is hampered by different enforcement levels across firms and countries. Moreover, the observed capital-market outcomes on one regulation differ if the effects of both regulations are not clearly dissociated. Thus, we caution researchers not to attribute capital-market outcomes primarily or solely to one regulation without taking into account the concomitant adoption of the other one.
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 Tackling Regional Disparities In Europe Through Growth written by AAVV and published by Lulu.com. This book was released on 2015-05-21 with total page 136 pages. Available in PDF, EPUB and Kindle. Book excerpt: This publication gathers the contributions from about 15 young authors and is the result of an event gathering about 30 young Liberal activists on how to tackle regional disparities through growth-based policies.
Download or read book Three Essays on Financial Information Disclosure written by Bo Zhang and published by . This book was released on 2018 with total page 129 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis is comprised of three essays on informational issues that revolve around financial reporting, governance, and disclosure. The first essay focuses on how International Financial Reporting Standards (IFRS) adoption by the Canadian fund industry impacts the funds' reported performance and managers' behavior. When Canada implemented IFRS for publicly accountable enterprises (PAEs) in 2011, it received much attention from international researchers, professionals, and regulators mainly for three reasons: (1) IFRS were more mature when adopted in Canada as nine amendments had been made from 2005 through 2010, and issues and uncertainties faced by earlier adopters such as firms from EU members may or may not exist in Canada; (2) pre-IFRS Canadian accounting standards were very close to that of the US, and thus, the Canadian experience has strong implication to the largest capital market which has not accepted IFRS as primary standards yet; (3) Canadian accounting and financial regulations have been shown to be more effective in controlling risks during the 2008 financial crisis compared to those of other major economies; how IFRS can strengthen such a tight system is to be examined and is important to IFRS proponents and standard setters. In 2014, Canada took the lead by being the first common law jurisdiction mandating IFRS for investment funds while most other countries hold up IFRS adoption in this particular industry due to various complications. This paper shows that IFRS adoption does affect the funds' outcomes and managers' behavior in Canadian closed-end investment funds, and voluntary disclosure of cash flows also strongly affects fund managers' return and valuation discretion. The implication is that if a country is not ready to fully implement IFRS in the fund industry because of complications at the accounting and financial levels, mandatory disclosure of cash flows could lead to better accounting quality as well, since one major difference between IFRS and GAAP is the disclosure of cash flows which constrains manager's discretion on asset appraisals. The second essay studies the implications from outside directors' turnover. Outside directors have been extensively studied as a governance factor, but their behaviors are not well documented in the literature, partly because most agency theory-based research concentrates on the behavior of managers, not that of directors. While the majority of studies in the governance literature analyze characteristics of directors in a static way, I look at this question in a dynamic way which considers directors' behaviors. This paper studies S&P 500 companies that have boardroom turnovers due to outside directors' unexpected departures. The departures of these non-executive directors usually do not trigger investors' concerns. However, our results show that when they do not provide concrete reasons, the firms from which they resigned experience underperformance afterward. This result suggests that directors may have resigned ahead of sub performance because of information they became privy to. The implication is strong to both regulators and investors. While governance regulations require a certain proportion of outside directors on compensation and audit committees with the intention of achieving efficient governance and releasing timely and reliable information, such mechanisms are substantially affected if outside directors do not fulfill their responsibilities when firms face challenges. Investors who take long positions should be alerted about outside directors' unexplained departure, and investors who take short positions may find opportunities when a company has boardroom turnover. The third essay examines a financial question around mergers and acquisitions announcements. In a tender offer, the bidder contacts shareholders of a target firm directly by announcing a public offer to tender their shares. The risk arises because the acquisition may or may not go through. Insiders typically have a better appreciation of the likelihood of a successful acquisition than outsiders, who have very limited access to strategic and private information. As a result, outsiders are at the disadvantageous position during mergers and acquisitions. This paper documents that besides official and public releases, outsiders can also rely on stock returns around announcements to infer private information to reduce information asymmetry. While current regulations and reporting standards do not have effective ways to minimize information asymmetry during mergers and acquisitions, this study highlights an avenue that indirectly mitigates outsiders' information disadvantage.
Download or read book Essays on the Implications of Mandatory IFRS Adoption written by Hans Bonde Christensen and published by . This book was released on 2008 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Financial Accounting and Equity Markets written by Philip Brown and published by Routledge. This book was released on 2013-06-19 with total page 443 pages. Available in PDF, EPUB and Kindle. Book excerpt: Philip Brown is one of the most admired and respected accounting academics alive today. He was a pioneer in capital markets research in accounting, and his 1968 article, co-authored with Ray Ball, "An Empirical Evaluation of Accounting Income Numbers," arguably had a greater impact on the course of accounting research, directly and indirectly, than any other article during the second half of the twentieth century. Since that time, his innovative research has focused on issues that bridge accounting and finance, including the relationships between net profit reports and the stock market, the long-run performance of acquiring firms, statutory sanctions and voluntary corporate disclosure, and the politics and future of national accounting standards to name a few. This volume brings together the greatest hits of Brown’s career, including several articles that were published in out-of-the-way places, for easier use by students and researchers in the field. With a foreword written by Stephen A. Zeff, and an introduction that discusses the evolution of Brown’s research interests and explains the context for each of the essays included in the volume, this book offers the reader a unique look inside this remarkable 50-year career.
Download or read book Mandating IFRS written by Dr. Edward Lee and published by . This book was released on 2008 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Economics and Politics of Accounting written by Christian Leuz and published by OUP Oxford. This book was released on 2005-09-15 with total page 434 pages. Available in PDF, EPUB and Kindle. Book excerpt: Accounting and the role of accountants has permeated the modern societies. For the most part we have accepted the impartiality and objectivity of accounting and not recognized how accounting systems are embedded in a country's economic and legal framework, much of which is in turn shaped by political processes. This web of interactions results in complex economic and political questions which require accounting researchers to focus on several related trends: information economics, regulatory economics, sociology, and political science. Although considerable progress has been made in the field of accounting, many fundamental questions are still subject to debate. In this book leading international scholars address a number of important questions: · What is the role of accounting in security valuation, decision making and contracting? · What can we learn from economics-based research in accounting? · What is the role of auditing and how can accounting standards be enforced? · What are the cost and benefits of accounting and disclosure regulation? · What is the role of accounting in society? · How does lobbying affect the political process of standard setting? · What are the consequences of the internationalization of standard setting? This seminal book will be of interest to academics, researchers, and graduate students of Accounting, Finance, Business Studies, Sociology, and Political Economy.
Download or read book Auditing Trust and Governance written by Reiner Quick and published by Routledge. This book was released on 2007-10-31 with total page 381 pages. Available in PDF, EPUB and Kindle. Book excerpt: The reputation of corporate reporting has been in crisis. Trust in the process of financial accounting and auditing has been undermined by a series of high profile scandals involving major corporations, including Enron, Parmalat, Ahold, and Worldcom. In response, regulators and practitioners world-wide have put forward a series of initiatives to re
Download or read book Governance matters VI aggregate and individual governance indicators 1996 2006 written by Daniel Kaufmann and published by World Bank Publications. This book was released on 2007 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: This paper reports on the latest update of the Worldwide Governance Indicators (WGI) research project covering 212 countries and territories and measuring six dimensions of governance between 1996 and 2006: voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption. This latest set of aggregate indicators are based on hundreds of specific and disaggregated individual variables measuring various dimensions of governance taken from 33 data sources provided by 30 different organizations. The data reflect the views on governance of public sector, private sector, and nongovernmental organization experts, as well as thousands of citizen and firm survey respondents worldwide. The paper also explicitly reports the margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. It finds that even after taking margins of error into account, the WGI permit meaningful cross-country comparisons, as well as monitoring progress over time. In less than a decade, a substantial number of countries exhibit statistically significant improvements in at least one dimension of governance, while other countries exhibit deterioration in some dimensions. The decade-long aggregate indicators, together with the disaggregated individual indicators, are available in a newly-redesigned website at www.govindicators.org.
Download or read book Economic Effects of Transparency in International Equity Markets written by Mark Lang and published by Now Publishers Inc. This book was released on 2011 with total page 79 pages. Available in PDF, EPUB and Kindle. Book excerpt: This monograph reviews the existing accounting, finance and economics literature on the economic effects of transparency in international equity markets, considers aspects of an international setting that make it an interesting environment for investigating these effects, and suggests directions for future research
Download or read book Earnings Quality written by Jennifer Francis and published by Now Publishers Inc. This book was released on 2008 with total page 97 pages. Available in PDF, EPUB and Kindle. Book excerpt: This review lays out a research perspective on earnings quality. We provide an overview of alternative definitions and measures of earnings quality and a discussion of research design choices encountered in earnings quality research. Throughout, we focus on a capital markets setting, as opposed, for example, to a contracting or stewardship setting. Our reason for this choice stems from the view that the capital market uses of accounting information are fundamental, in the sense of providing a basis for other uses, such as stewardship. Because resource allocations are ex ante decisions while contracting/stewardship assessments are ex post evaluations of outcomes, evidence on whether, how and to what degree earnings quality influences capital market resource allocation decisions is fundamental to understanding why and how accounting matters to investors and others, including those charged with stewardship responsibilities. Demonstrating a link between earnings quality and, for example, the costs of equity and debt capital implies a basic economic role in capital allocation decisions for accounting information; this role has only recently been documented in the accounting literature. We focus on how the precision of financial information in capturing one or more underlying valuation-relevant constructs affects the assessment and use of that information by capital market participants. We emphasize that the choice of constructs to be measured is typically contextual. Our main focus is on the precision of earnings, which we view as a summary indicator of the overall quality of financial reporting. Our intent in discussing research that evaluates the capital market effects of earnings quality is both to stimulate further research in this area and to encourage research on related topics, including, for example, the role of earnings quality in contracting and stewardship.
Download or read book Standardization of Financial Reporting and Accounting in Latin American Countries written by Lourenço, Isabel and published by IGI Global. This book was released on 2015-07-01 with total page 371 pages. Available in PDF, EPUB and Kindle. Book excerpt: Accounting has often been described as the language of business. As the increasing competition of overseas markets begins to affect even the smallest local companies, many more business professionals must become fluent in accounting principles and practice. Standardization of Financial Reporting and Accounting in Latin American Countries highlights the recent move to International Financial Reporting Standards (IFRS) and addresses some of the concerns raised due to cultural differences and the level of enforcement of these standards in separate countries. Describing the evolution of both financial and managerial accounting due to the adoption of IFRS, this book is an essential reference source for both students and seasoned professionals in the fields of accounting, finance, and related management fields, especially those with an international emphasis.
Download or read book The Regulatory Responses to the Global Financial Crisis written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2014-03-14 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: We identify current challenges for creating stable, yet efficient financial systems using lessons from recent and past crises. Reforms need to start from three tenets: adopting a system-wide perspective explicitly aimed at addressing market failures; understanding and incorporating into regulations agents’ incentives so as to align them better with societies’ goals; and acknowledging that risks of crises will always remain, in part due to (unknown) unknowns – be they tipping points, fault lines, or spillovers. Corresponding to these three tenets, specific areas for further reforms are identified. Policy makers need to resist, however, fine-tuning regulations: a “do not harm” approach is often preferable. And as risks will remain, crisis management needs to be made an integral part of system design, not relegated to improvisation after the fact.
Download or read book Global Financial Development Report 2014 written by World Bank Group and published by World Bank Publications. This book was released on 2013-11-07 with total page 226 pages. Available in PDF, EPUB and Kindle. Book excerpt: The second issue in a new series, Global Financial Development Report 2014 takes a step back and re-examines financial inclusion from the perspective of new global datasets and new evidence. It builds on a critical mass of new research and operational work produced by World Bank Group staff as well as outside researchers and contributors.
