Earnings Management and Value Relevance During the Mandatory Transition from Local GAAPs to IFRS in Europe

Čapkun, Vedran; Jeny, Anne; Jeanjean, Thomas; Weiss, Lawrence A.

doi:10.2139/ssrn.1125716

Cited by 72 publications

(71 citation statements)

References 21 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…This problem lies in the fact that the companies that receive benefits or product advantages from the implementation of IFRS will have an incentive to do so before the established deadline, which can exacerbate the effects of these standards on the quality of the financial statements (Jeanjean & Stolowy, 2008). Moreover, uncertain effects on EM have also been identified in the years soon after the transition from local rules to IFRS (Jeanjean & Stolowy, 2008), which is in line with other studies that have been conducted on the adoption of IFRS that indicate the noticeable effect the figures of the income statement and the balance sheet can have (Aisbitt, 2006;Capkun & Cazavan-Jeny, 2008;Cormier, Demaria, LapointeAntunes & Teller, 2009;Haller, Ernstberger & Froschhammer, 2009).…”

Section: Review Of the Literature And Proposal Of The Hypothesessupporting

confidence: 79%

Impact of IFRS on the quality of financial information in the United Kingdom and France: Evidence from a new perspective

Peña

Franco

2017

View full text Add to dashboard Cite

Findings: Firm size influences the impact of IFRS in the UK, and the financial information of larger firms seems to have improved after IFRS adoption. In the case of France, the results do not support any improvement in the quality of the financial information after IFRS were put in place. Research limitations/implications:This research applies a new methodological approach to study the impact of IFRS adoption, but additional inquires on the subject are surely required.-850-Intangible Capital -https://doi.org/10.3926/ic.939Practical implications: Certain features of the countries, such as the Common Law legal system and enforcement, could explain why the quality of the financial information for large firms has increased following the adoption of IFRS. It seems that the implementation of IFRS has given investors additional elements with which to ascertain a firm's ability to generate future cash flows. Social implications:The adoption of IFRS, by itself, is not enough to improve the quality of financial information. Thus, regulators in countries adopting IFRS should consider additional reforms to ensure that the desired results are achieved.Originality/value: This work overcomes the methodological design problems of previous research, such as sample selection bias, the inclusion of observations close to the year of mandatory adoption, the heterogeneity of each country and the size of the analyzed companies.To the best of our knowledge, this research is the first to test the effect of IFRS adoption in the European context, using the relation between idiosyncratic risk and the opacity of financial reports.

show abstract

Section: Review Of the Literature And Proposal Of The Hypothesessupporting

confidence: 79%

Impact of IFRS on the quality of financial information in the United Kingdom and France: Evidence from a new perspective

Peña

Franco

2017

View full text Add to dashboard Cite

show abstract

“…Some of the firms were also not included due to the inconsistency of the financial statements over the years. Capkun et al (2008) state that studying with the negative book value per share may cause some difficulties for analyzing the distressed or non-stressed firms. On the other hand, many other studies include the firm-year observations with the negative book value per share.…”

Section: Sample Selectionmentioning

confidence: 99%

Mandatory adoption of IFRS in emerging markets: the case of Turkey

Temiz¹,

Güleç²

2017

JAMIS

View full text Add to dashboard Cite

Abstract:European-listed companies and many emerging countries have been required to present their consolidated financial statements in compliance with the International Financial Reporting Standards (IFRS) since 2005. Having cross-border comparability and transparency with this uniform accounting system is expected to provide higher accounting quality and value relevance. Evaluation of financial performance in terms of value relevance of IFRS is not only vital for existing investors or stakeholders but also for those who want to invest at the international level. Thus, in this study, we examine the value relevance of earnings and book value of equity on share prices through using Ohlson (1995) We test the value relevance with both cross-sectional and pooled regression for the periods. In addition, we use panel data analysis (survival analysis) to validate the increase in value relevance between the periods. We also test the firm size and earnings announcement effect on value relevance for robustness.

show abstract

“…In this vein, among the central research question which was examined by previous research is: Have mandatory adoption of IFRS improves earnings quality by constraining management earnings discretion [2] in the E.U countries, namely France? Through literature review, we found two principal shortcomings about this issue: The first shortcoming is that the prior literature (such as Capkun et al 2008, Zeghal et al 2012) on the impact of mandatory IFRS adoption on earnings management has concentrated mainly on the discretionary accruals as measure of earnings management. However, earnings management can be also undertaken by managers based on real transactions.…”

Section: Introductionmentioning

confidence: 99%

Effect of the Mandatory Adoption of IFRS on Real and Accruals-based Earnings Management: Empirical Evidence From France

Sellami

Fakhfakh

2013

International Journal of Accounting and Economics Studies

View full text Add to dashboard Cite

The main purpose of this study is to examine whether the mandatory IFRS adoption within French listed companies provides higher earnings quality. More precisely, we study the impact of mandatory IFRS adoption on two approaches of earnings management: real and accruals-based earnings management. This study focuses on a sample of 1488 firm-year observations, 124 firms drawn from the 250 French-listed companies during the period from 1999 to 2011. We use the panel data for our analysis. Specifically, the FGLS estimator method is conducted in our regression models. Our results indicate that the absolute value of discretionary accruals is significantly reduced six years after the mandatory adoption of IFRS. We also find a negative association between the real earnings management and the mandatory adoption of IFRS. Overall, we can deduce that earnings quality is improved in the post-IFRS period in the French context.

show abstract

Earnings Management and Value Relevance During the Mandatory Transition from Local GAAPs to IFRS in Europe

Cited by 72 publications

References 21 publications

Impact of IFRS on the quality of financial information in the United Kingdom and France: Evidence from a new perspective

Impact of IFRS on the quality of financial information in the United Kingdom and France: Evidence from a new perspective

Mandatory adoption of IFRS in emerging markets: the case of Turkey

Effect of the Mandatory Adoption of IFRS on Real and Accruals-based Earnings Management: Empirical Evidence From France

Contact Info

Product

Resources

About