IFRS Mandatory Adoption Effect on the Information Asymmetry: Immediate or Delayed?

Turki, Hela; Wali, Sonda; Boujelbène, Younés

doi:10.14453/aabfj.v11i1.5

Cited by 21 publications

(25 citation statements)

References 37 publications

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“…Specifically, comparing the pre‐ and post‐adoption of IFRS, the frequency of voluntary disclosure is higher for the post‐IFRS period (2011–2018), while the ratio of split ratings is lower for the post‐IFRS period (2011–2018). These results are consistent with prior studies in that IFRS, principle‐based accounting standards, reduce information asymmetry (i.e., Beneish and Yohn, 2008; Barth et al 2008; Turki et al 2017).…”

Section: Resultssupporting

confidence: 92%

Voluntary Disclosure and Rating Disagreement among Credit Rating Agencies: Evidence from Korea

Kim

2021

Asia-Pac J of Fin Stud

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We examine the effect of voluntary disclosure on rating disagreement among credit rating agencies (CRAs). Previous empirical findings suggest that precise financial reporting decreases information risk and affects split ratings. However, no prior research has investigated the relationship between voluntary disclosure and split ratings, even though such disclosure can reduce information asymmetry. We find a negative relationship between voluntary disclosure and split ratings by CRAs. This study reveals voluntary disclosure that includes the manager's intentions (i.e., discretionary judgment) is a determinant of split ratings. In doing so the study contributes to the literature on the role of voluntary disclosure on CRAs.

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Section: Resultssupporting

confidence: 92%

Voluntary Disclosure and Rating Disagreement among Credit Rating Agencies: Evidence from Korea

Kim

2021

Asia-Pac J of Fin Stud

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“…They found information asymmetry reduced after IFRS adoption. Finally, Turki et al (2017) same as Armstrong et al (2008) and Preiato, Brown and Tarca (2009) found IFRS/IAS reduces significantly the information asymmetry level in EU countries.…”

Section: Literature Reviewsupporting

confidence: 60%

Does IFRS Drive Information Asymmetry Reduction? Evidence from Asean-6 Countries

Nejad¹,

Ahmad²,

Rahim³

et al. 2020

AJAG

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International Financial Reporting Standard (IFRS) is globally accepted as a high-quality reporting standard. Countries implement IFRS because they believe that more disclosure leads to agency costs reduction and may result in adverse selection costs or information asymmetry reduction. However, studies on the relationship between IFRS and information asymmetry have thus far provided mixed evidence. On the other side, there are limited studies in this area that are focused on ASEAN countries. Therefore, more studies are needed to better understand whether IFRS drives information asymmetry reduction especially in ASEAN countries as developing countries. Therefore, this study contributes to knowledge by examining the association between IFRS and information asymmetry within ASEAN-6 countries, as a setting for developing countries. The results of the OLS (Static Panel estimation technique) indicate that IFRS has a negative and significant relationship with information asymmetry. It reveals that IFRS results in information asymmetry reduction throughout ASEAN-6 countries. Besides using the OLS, this study also applies a Generalized Moment Method (GMM) as an additional test, to measure dynamic relationships and correct the potential endogeneity problem between IFRS and information asymmetry. Besides theoretical and methodological contributions, findings of this study are useful for the adopter and non-adopter countries to understand the consequences of IFRS compliance on information asymmetry. The findings provide important inputs to policymakers of Indonesia and Vietnam who are contemplating adopting IFRS.

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“…When there is a major change in policy, it is appropriate to test the impacts of that change, such as when the Sarbanes-Oxley Act was introduced [see Lobo and Zhou (2006)], or the adoption of International Financial Reporting Standards (IFRS) [see Callao et al (2007) and Turki et al (2017) for examples]. This is to understand the impacts of changes, intended or otherwise, to make any modifications to policy or practice.…”

Section: Discussionmentioning

confidence: 99%

Quantitative impacts of mandatory integrated reporting

Conway

2019

JFRA

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Purpose This paper aims to examine the impact of the 2011 mandatory introduction of integrated reporting (<IR>) on the financial performance, risk and institutional shareholding of listed companies in South Africa to assess whether there is a benefit to <IR> and which may encourage greater adoption of it globally. It contrasts the results with two other African stock exchanges (Nigeria and Egypt with no mandatory <IR>) and examines whether <IR> quality also has an impact on these and on environmental, social and governance (ESG) disclosure scores. Design/methodology/approach A series of multivariate ordinary least squares regressions was estimated on a range of financial, risk, institutional and ESG data from firms on the three African stock exchanges, between 2006 and 2015. Findings Financial performance and risk in South African firms appear to have decreased since the start of mandatory reporting, but institutional shareholding has increased. The production of higher quality reports is associated with decreased financial performance and risk, higher institutional shareholding and increased ESG scores. Originality/value This study is first to test the quantitative effects of <IR> and <IR> quality on a broad range of financial performance and risk measures and the level of institutional shareholding. It also adds to the literature by assessing how the quality of <IR> can impact the ESG scoring of the business. Hence, this study is of interest to firms looking to adopt <IR> for its benefits and to regulatory bodies considering the mandatory adoption of <IR> in support of achievement of national social and environmental goals.

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IFRS Mandatory Adoption Effect on the Information Asymmetry: Immediate or Delayed?

Cited by 21 publications

References 37 publications

Voluntary Disclosure and Rating Disagreement among Credit Rating Agencies: Evidence from Korea

Voluntary Disclosure and Rating Disagreement among Credit Rating Agencies: Evidence from Korea

Does IFRS Drive Information Asymmetry Reduction? Evidence from Asean-6 Countries

Quantitative impacts of mandatory integrated reporting

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