2017
DOI: 10.1111/auar.12165
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Does IFRS Mandatory Adoption Affect Information Asymmetry in the Stock Market?

Abstract: The purpose of International Financial Reporting Standards (IFRS), adopted mandatorily by European listed firms in 2005, is to increase the transparency and the comparability of accounting information, which should have led to improvements in these firms' information environment. This study uses market microstructure proxies for information asymmetry to examine the effects of IFRS adoption on the level of information asymmetry in the Spanish stock market. Therefore, we consider a setting with substantial diffe… Show more

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Cited by 37 publications
(54 citation statements)
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“…The Accounting Standards for Enterprises of China also requires that “Accounting information provided by enterprises shall be comparable.” Comparability is defined as the quality of information that enables users to identify similarities and differences in the financial performance of two firms (FASB, ). Prior studies have documented that adhering to the same accounting standards improves financial statement comparability (e.g., Abad, CutillasGomariz, SánchezBallesta, & Yagüe, ; Barth et al, ; Brochet et al, ). Accordingly, such an adherence ensures that managers account for similar transactions in a similar manner and dissimilar transactions differently (Schipper, ).…”
Section: Literature Review and Hypothesis Developmentmentioning
confidence: 99%
“…The Accounting Standards for Enterprises of China also requires that “Accounting information provided by enterprises shall be comparable.” Comparability is defined as the quality of information that enables users to identify similarities and differences in the financial performance of two firms (FASB, ). Prior studies have documented that adhering to the same accounting standards improves financial statement comparability (e.g., Abad, CutillasGomariz, SánchezBallesta, & Yagüe, ; Barth et al, ; Brochet et al, ). Accordingly, such an adherence ensures that managers account for similar transactions in a similar manner and dissimilar transactions differently (Schipper, ).…”
Section: Literature Review and Hypothesis Developmentmentioning
confidence: 99%
“…Based on the studies by Benson et al (2015) and Linnenluecke et al (2017b), we extend the IFRS-related literature review of the nine accounting journals in the Asia-Pacific region to 2018. We identify that 33 articles specifically discuss the outcomes of IFRS adoption such as the readability of financial statements (Richards and van Staden, 2015;Cheung and Lau, 2016), predictability of earnings (Bodle et al, 2016;Palea and Scagnelli, 2017), earnings transparency (Ye et al, 2018), audit (Nam, 2018), usefulness and accuracy of goodwill disclosure (Amor os Mart ınez and Cavero Rubio, 2018), and information asymmetry of the stock market (Abad et al, 2018). Additionally, numerous studies investigate IFRS-related issues in emerging markets such as Jordan (Al-Htaybat, 2018), Malaysia (Che Azmi and English, 2016), Oman (Lourenc ßo et al, 2016), Brazil (Nakao and Gray, 2018), and China (Yang et al, 2018;Ye et al, 2018).…”
Section: Introductionmentioning
confidence: 99%
“…IFRS has been implemented by countries to improve reporting quality, reduce information processing costs, and reduce information asymmetry among capital market participants within and across countries. (Gordon et al 2012;Aliabadi & Shahri 2016;Persakisa & Iatridis 2017;Abad et al 2017). The reduction in information asymmetry would occur with IFRS implementation for two potential reasons.…”
Section: Literature Reviewmentioning
confidence: 99%