IFRS, Information Asymmetry and Growth Opportunities

Abstract

This paper aims to examine the impact of IFRS / IAS mandatory adoption on the information asymmetry measured by the properties of financial analysts' forecasts (error and dispersion). It examines also, whether this impact differs from one company to another with regard to its growth opportunities. This study is based on a longitudinal data set (2002 – 2012) obtained from a sample of companies that belong to the CAC all tradable indexes. The results show a significant effect of these international's standards on financial analysts' forecasts, which stress the improvement of earnings' informational content. By focusing on the effect of growth opportunities, the results show also that they don't moderate significantly the relationship between IFRS and qualities of financial analysts' forecasts. This allows to conclude that IFRS are able to reflect the true value of the company regardless its growth opportunities