Voluntary disclosure of financial information by French firms: Does the introduction of IFRS matter?

Bruslerie, Hubert de La; Gabteni, Héger

doi:10.1016/j.adiac.2014.09.016

Cited by 13 publications

(8 citation statements)

References 52 publications

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“…increase the accuracy of management forecasts). Finally, our study extends those of Mnif (2010), De la Bruslerie and Gabteni (2014); Zouari et al (2015) and Rouhou et al (2015) by providing new evidence that, in France, an independent and a large board along with IFRS adoption are closely tied with companies’ propensity, to issue more accurate earnings forecasts, and not just with the extent of voluntary disclosure.…”

Section: Introductionsupporting

confidence: 65%

“…In the French context, De la Bruslerie and Gabteni (2014) analyzed annual reports of 67 firms for the period 2003-2008 to investigate whether IFRS adoption increases the voluntary disclosure. Their results show that voluntary disclosure policies experienced an upward swing with IFRS adoption.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…Rouhou et al (2015) examine the impact of IFRS mandatory adoption by French firms on analysts’ earnings forecasts accuracy. De la Bruslerie and Gabteni (2014) investigate whether IFRS adoption increases the voluntary disclosure. However, other research studies focus on the management forecast accuracy.…”

Section: Introductionmentioning

confidence: 99%

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IFRS adoption, corporate governance and management earnings forecasts

Hlel

Kahloul

Bouzgarrou

2020

JFRA

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Purpose This paper aims to examine whether International Financial Reporting Standards (IFRS) adoption and corporate governance attributes increase the management earnings forecasts’ accuracy disclosed in prospectuses for French Initial Public Offerings (IPOs). Design/methodology/approach The analysis is based on cross-sectional regression explaining the absolute forecast errors by using 45 French firms that made IPOs between 2005 and 2016 in two French financial markets: Euronext and Alternext. Findings In agreement with the agency theory and the signaling theory, the authors find that the IFRS adoption and the effective corporate governance, proxied by the board characteristics, increase the accuracy of management forecasts. As a result, this latter gives a credible signal in constructing and sustaining shareholders’ trust on the transparency and the reliability of such financial information. Research limitations/implications It is plausible that the limited size of the sample represents a limitation of this study. Another limitation is that no other corporate governance attributes such as board meeting frequency, audit committee measures and ownership structure are used. Practical implications Shareholders can take benefit from management forecasts accuracy to structure their investment portfolios efficiently to allocate their funds more effectively and mitigate the costs of adverse selection that they have to face. Furthermore, the authors expect the findings to be interesting to IPO firms, as this study highlights the efficiency of larger and independent boards in decreasing managerial discretion, increasing disclosure quality and supervising management. The results could encourage GAAP-adopters countries to move toward IFRS, as this research reinforces the role of IFRS in enhancing the quality of financial disclosure by offering the required information for shareholders. Originality/value This study is important because the potential investors should assess management earnings forecasts accuracy before they consider it when evaluating IPO firms. Also, this paper has some implications for the financial market. It is recommended that future investors pay more attention, when assessing the accuracy of management earnings forecasts, to the accounting regulations of the financial reporting along with the corporate governance mechanisms. Moreover, this study could incite French regulators to revise the AFEP-MEDEF code. Under this code, it could insist that larger and independent boards are more effective in performing their governing roles than smaller boards.

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Section: Introductionsupporting

confidence: 65%

Section: Literature Review and Hypothesesmentioning

confidence: 99%

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IFRS adoption, corporate governance and management earnings forecasts

Hlel

Kahloul

Bouzgarrou

2020

JFRA

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“…The adoption of the International Financial Reporting Standards (IFRS) was an important switch for European companies. In France, IFRS inserted an exogenous and unique change in the level of mandatory disclosure in response to increased capital-market request (de La Bruslerie and Gabteni, 2014). In fact, the implementation of IFRS is considered by signalling theory as a positive signal of higher quality and transparency of financial disclosure (Masoud, 2017).…”

Section: Introductionmentioning

confidence: 99%

Board characteristics, IFRS adoption and voluntary disclosure: evidence from management forecasts accuracy in France

Hlel

Nafti

2019

IJMED

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In this article, we examine whether the IFRS adoption and the strong corporate board contribute effectively to reduce the information asymmetry by enhancing the quality of voluntary disclosure in the case of French IPOs. Our measure of disclosure quality is denoted by the absolute forecast error as a proxy for management earnings forecasts accuracy. We find evidence that the adoption of IFRS gives a credible signal of higher disclosure quality and lower information asymmetry through the improvement of the management earnings forecasts accuracy. Also, we find that the independent and larger boards do play an important role in promoting corporate transparency by conveying more accurate earnings forecasts. These findings suggest that future shareholders can benefit from receiving better forecasts. Accurate management forecasts can allow them to identify the companies they want to invest in, and to reduce the costs of adverse selection that they have to face.

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“…Many previous studies have argued that companies active in the capital market, are more willing to disclose information (Lang & Lundholm, 1993, 2000Frankel et al, 1995;Healy et al, 1999;Healy & Palepu, 2001;Datta et al, 2013;de La Bruslerie & Gabteni, 2014). Therefore, managers usually try to provide more information and better understanding of the company's performance for external people, even in an efficient capital market (Francis et al, 2008).…”

Section: Introductionmentioning

confidence: 99%