Have IFRS Affected Earnings Management in the European Union?

Callao, Susana; Jarne, José Ignácio Jarne

doi:10.1080/17449480.2010.511896

Cited by 187 publications

(128 citation statements)

References 63 publications

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“…They noted higher market liquidity, decreased costs of capital and an increase in equity valuations around the time of IFRS introduction. Aubert et al (2012) In contrast, Callao et al (2010) gave evidence of increased earnings management after the IFRS adoption. They analyzed earnings management in non-fi nancial fi rms listed in 11 European countries with a total of 1408 companies by comparing discretionary accruals in the period preceding and immediately after the regulatory change.…”

Section: Literature Underpinningmentioning

confidence: 99%

“…The expected benefi t of implementing IFRS is to enhance comparability and transparency of fi nancial information and thus increase the quality of fi nancial reporting. Some previous studies (Barth et al, 2008;Daske, 2008;Jeanjean et al, 2008;Callao et al, 2010,) focus on the economic consequences of implementing IFRS with both confi rming and rejecting the hypothesis about the positive infl uence of IFRS.…”

Section: Literature Underpinningmentioning

confidence: 99%

“…There has been a shift from a rule-based system to a principle-based system (Callao et al, 2010). The International Accounting Standards Board (IASB) leans toward the principle-based approach which needs managers' as well as auditors' professional judgment to ensure that a fi nancial statement will faithfully refl ect the economic substance and transaction.…”

Section: Literature Underpinningmentioning

confidence: 99%

See 2 more Smart Citations

Influence of IFRS on Earnings Manipulation: Evidence from the European Union

Miková¹

2014

AOP

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Section: Literature Underpinningmentioning

confidence: 99%

Section: Literature Underpinningmentioning

confidence: 99%

Section: Literature Underpinningmentioning

confidence: 99%

See 1 more Smart Citation

Influence of IFRS on Earnings Manipulation: Evidence from the European Union

Miková¹

2014

AOP

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“…Therefore, a number of studies focused on technical aspects related to the IFRS adoption (i.a., Andrei, Marchini, & Tibiletti, 2005;Corbella, Florio, Lionzo & Tessitore, 2007;Corbella & Florio, 2010), on the different informative content of financial statements (i.a., Paglietti, 2009;Capkun, Cavazan-Jeny, Jeanjean & Weiss, 2010;Mauro & Catuogno, 2010;Pieri, 2010;Veneziani, Carini, Bendotti & Teodori, 2010) and on the competing issues mentioned above (i.a., Mattei, 2006;Quagli, Avallone & Ramassa, 2007;Aussenegg, Inwink & Schneider, 2008;Cai, Rahman, & Courtenay, 2008;Capkun et al, 2008;Paglietti, 2009;Callao & Jarne, 2010). Our study aims at contributing to the literature on IFRS adoption in Italy shedding light on the actual impacts of the transition to IFRS on financial statements, on the relevance of such impacts on main accounting figures, and on the different degree of subjectivity arising from the adoption of those evaluation criteria which had great impacts on the financial statements presented by Italian companies.…”

Section: Ifrs Adoption In Italymentioning

confidence: 99%

IFRS Adoption in Italy: Which Effects on Accounting Figures and Subjectivity?

Corbella

Florio

Rossignoli

2013

AFR

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The issue about the degree of subjectivity incidental to financial statements is topical, although it has long been studied and debated. Indeed, such issue recurs any time new accounting rules or standards are issued. And, of course, it recurs in case of a complete renovation of the accounting system of reference, such as the one that took place in Europe in 2005, when all listed companies were required to repeal their national accounting rules and GAAP, and to adopt IFRS for the preparation of their consolidated financial statements.This study focuses on such transition with specific reference to the Italian context and explores three interconnected issues: a) identification of the changes in the evaluation criteria -from the Italian regulations and GAAP to IFRSwhich actually impact on the financial statements presented by Italian companies in the year of transition; b) appreciation of the importance of such impacts, based on (1) how often each adjustment recurs; (2) whether they determine an increase or decrease in accounting figures and (3) how relevant their effects are on the main accounting figures, namely net earnings and net capital; c) discussion about the managerial discretion introduced by the most impacting evaluation criteria identified, in comparison with the Italian provisions and GAAP previously applied.The overall analysis demonstrates that IFRS introduction determined wide impacts on financial statements, affecting most assets and liabilities, but its impacts on accounting figures were less significant than could be expected. In terms of subjectivity, however, differences are very significant.

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“…There is also research that suggests the contrary that there is no decrease in the earnings management. This is taking by (Ball et al, 2000 and2003;Lin et al, 2006;Burgstahler et al, 2006;Ding et al, 2007;Soderstrom et al, 2007;Callao et al, 2010;Tsalavoutas, 2010, andRudra, 2011). Some further research is also done by looking at the difference level of earnings management between before and after the IFRS adoption, such as Christensen (2008) …”

Section: Introductionmentioning

confidence: 99%