Notice of Retraction: How to measure financial reporting quality internationally?

Chen, Huifa; Jiang, Yihong; Tang, Qingliang; Lin, Zhijun

doi:10.1109/icebeg.2011.5882149

Cited by 1 publication

(4 citation statements)

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“…However, the external validity of firm-level research in gauging the marketlevel impact is debatable. Studies by Chen et al (2011) and Tang et al (2012) utilize measurements of financial information quality that is more appropriate for countrylevel comparisons. The quality of financial information is measured using 5 indicators.…”

Section: Financial Information Quality Indicatorsmentioning

confidence: 99%

“…The PDAR is a fraction (Burgstahler & Dichev 1997;Chen et al 2011;Tang et al 2012) represented by the total number of firms with small profit increases over the total number of firms with small profit decreases. Firms with small profit increases are defined as firms with a change in return on assets (∆ROA) between 0 and 0.005, while firms with small profit decreases are defined as firms with a change in return on assets (∆ROA) between -0.005 and 0.…”

Section: Financial Information Quality Indicatorsmentioning

confidence: 99%

“…Following extant studies, the present study measures accruals quality using accruals divided by lagged total assets. The following equation is used to calculate AR (Chen et al 2011;Sloan 1996;Tang et al 2012): In order to calculate the AR of a country, the AR of all firms (firm-level) in the country must be calculated first. Then, the median of the calculated ARs is determined to represent the AR of the country.…”

Section: Financial Information Quality Indicatorsmentioning

confidence: 99%

“…To ensure that the findings are robust, one further test is performed by adopting an overall quality index method (Chen et al 2011;PricewaterhouseCoopers 2001;Tang et al 2012) to compute the Financial Reporting Quality Index (FRQI). First, the countries are ranked according to the five indicators utilized to measure financial information quality.…”

Section: Robustness Test Financial Reporting Quality Index (Frqi)mentioning

confidence: 99%

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International Financial Reporting Standards and Financial Information Quality: Principles versus Rules-based Standards

Rad

Embong²

2013

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The objective of the present study is to examine whether the adoption of International Financial Reporting Standards (IFRS) increases financial information quality. The IFRS brings about substantial changes in accounting standards. One of the prominent features of the system is that it results in the production of financial information of higher quality. Most extant studies in this area are performed at firm-level. The present study, on the other hand, examines the impact of IFRS adoption at the country-level. Environmental determinism theory states that accounting is a function of environmental variables, such as ownership structure, information environment and capital market condition. Therefore, the impact of IFRS adoption could be different across different countries. The present study addresses the existing lack of research that compares the outcomes of IFRS adoption between countries. Besides comparing the quality of financial information before and after the adoption of IFRS, the present study also compares the effects of IFRS adoption between countries with different accounting bases prior to the adoption. The results show that financial information quality, measured by five indicators, improves after IFRS adoption; and that the impact is more prevalent in a rules-based country compared to a principles-based country.

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Section: Financial Information Quality Indicatorsmentioning

confidence: 99%

Section: Financial Information Quality Indicatorsmentioning

confidence: 99%