The Determinants of Firm-Specific Corporate Governance Arrangements, IFRS Adoption, and the Informativeness of Accounting Reports: Evidence from Brazil

Abstract

In this study we investigate the complementary effect of firm-level incentives and IFRS adoption on the informativeness of accounting reports in Brazil. Using a specially constructed corporate governance index—Brazilian Corporate Governance Index (BCGI)—we show that the quality of corporate governance is linked to the growth opportunities firms face. Consistent with the argument that accounting numbers are essential elements of corporate governance arrangements, we show that improvements in corporate governance are associated with economically material and statistically significant improvements in indicators of accounting quality. We also show that corporate governance quality and accounting quality are also positively affected by cross-listing, although cross-listing is not the only driver of either of these quality choices. Our results also show that IFRS adoption leads to an increase in the informativeness of accounting reports in Brazil, especially for firms that do not possess the ex ante incentives to produce high-quality financial statements.

The Effects of Corporate Governance and Product Market Competition on Analysts' Forecasts: Evidence from the Brazilian Capital Market

“…As shown in Chart 2, our main independent variables are product market competition and corporate governance. We use the Herfindahl Index as a proxy for product market competition and the Brazilian Corporate Governance Index used by Lopes and Walker (2008), Lopes (2009), and Lopes and Walker (2012) AFA is the negative of the absolute value of the analysts' forecast errors (the difference between the analysts' consensus forecasts and the actual earnings per share) deflated by the stock price.…”

Fatores determinantes da qualidade da informação contábil em empresas brasileiras listadas na BM&FBovespa

“…Para medir a qualidade da informação contábil não existe apenas uma única métrica, mas sim, diversos modelos que capturam diferentes propriedades, dentre elas: gerenciamento de resultados, conservadorismo, relevância, tempestividade da informação, persistência e oportunidade (WANG, 2006;LOPES, 2009;HERCULANO;. Nesta pesquisa, a qualidade da informação contábil será observada por meio do gerenciamento de resultados, assim como ocorreu nos estudos de Coelho e Lopes (2007), Nardi et al (2009), Formigoni et al (2012, , Mazzioni et al (2015) e Moura et al (2016).…”

“…Os principais fatores que têm sido apontados como capazes de influenciar na qualidade são concentração acionária (BAPTISTA, 2008;GONZAGA;COSTA, 2009;SARLO NETO;DALMÁCIO, 2010;SARLO NETO;BALDEZ, 2015;HERCULANO; e governança corporativa (LOPES, 2009;MARTINEZ, 2011;GABRIEL;SILVEIRA, 2011;BARROS;SOARES;LIMA, 2013;ERFURTH;BEZERRA, 2013;MANSOR et al, 2013;PICCOLI;SOUZA;MAZZIONI et al, 2015). Todavia, existem outros fatores ainda pouco explorados, como o nível de competitividade de mercado (DHALIWAL et al, 2008; e o nível de intangibilidade (KLAPPER;LOVE, 2004;.…”

“…Para aferição da qualidade da informação contábil são utilizadas diferentes métricas, tais como o gerenciamento de resultados, conservadorismo, relevância, tempestividade, persistência e oportunidade (WANG, 2006;LOPES, 2009). …”

IFRS adoption, stock price synchronicity and volatility

“…Section 2.3.2.2 in Chapter 2 provides full background regarding the literature that relates corporate transparency to an improvement in the informational environment (e.g., Habib, 2008;Beuselinck et al, 2010;Dasgupta et al, 2010;J. Kim & Shi, 2012) and the Brazilian financial markets characteristics, namely low financial development, weak institutions and enforcement mechanisms (C. Anderson, 1999;La Porta et al, 1998;Kaufmann, Kraay, & Mastruzzi, 2007;Lopes & Walker, 2010), and highly concentrated ownership structures (Dami, Rogers, & Sousa Ribeiro, 2007;Hahn, Nossa, Teixeira, & Nossa, 2010) that may indicate poor investor protection (La Porta et al, 1998).…”