This study investigates how mandatory adoption of the new accounting standards and enforcement mechanisms such as Big 4 auditors and board independence influence earnings management. Based on a sample of 120 firms listed on the French stock exchange, we find that the mandatory adoption of IFRS does not affect managerial opportunism. In contrast with previous studies, our results show that the corporate governance mechanisms are not sufficiently strong to enforce the application of the IFRS standards in France. This can be due to the special characteristics of the French context known by the weak investors' protection rights even in the post-IFRS period. IFRS can be of high quality just if they are accompanied with some factors like efficient governance mechanisms and appropriate enforcement.

This study examines how mandatory IFRS adoption influences international investors" ownership and decisions. Based on a sample of French firms listed on the SBF 120 stock index, we find that international accounting harmonization leads to attract foreign equity to France. Investors become more confident and transactions are more transparent, which facilitates decision making. We try also to understand the characteristics and influence of governance mechanisms as means of IFRS enforcement. We show that the change in foreign institutional holdings depends on effective enforcement. However, corporate governance mechanisms are not all efficient in enforcing these standards in France. Indeed, a high audit quality represents a key factor which can help firms to attract non domestic shareholders, but the passivity of the independent board members is clear for the French companies of our sample.

This paper examines the moderating role of corporate governance mechanisms on the relationship between mandatory international financial reporting standards (IFRS) and foreign investors’ ownership. This study is based on a sample of French firms listed on the SBF 120 stock index with an observation period from 2002 to 2012. The results show that IFRS adoption leads to an increase in foreign equity in the French firms. This is consistent with the idea that international accounting harmonization improves financial statements comparability and transactions transparency which attracts more foreign investors. We also show the role of governance mechanisms as means of IFRS enforcement. In fact, the increase in foreign investors’ ownership depends on effective enforcement. However, for the French case, only BIG four auditors are efficient in enforcing IFRS adoption while independent board members have close relationship with managers which results in a passive attitude. Our findings imply that information quality has an important role in decision making. But they also show that IFRS adoption should be joined by efficient enforcement tools to conduct presumed benefits.