The Effect of IFRS and its Enforcement on Earnings Management: An International Comparison

Cai, Lei; Rahman, Asheq; Courtenay, Stephen M.

doi:10.2139/ssrn.1473571

Cited by 54 publications

(49 citation statements)

References 12 publications

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“…One comprehensive study of the latter (Cai et al 2008) was based on more than 100,000 firm-year observations drawn from 32 countries between 2000 and 2006 and employed a country-level enforcement index (Hope et al 2006). The extent of earnings management was found to have been declining over time and it was less prevalent in countries with a stronger enforcement process.…”

Section: What Else May Be Necessary To Achieve Maximum Benefits From mentioning

confidence: 99%

International Financial Reporting Standards: what are the benefits?

Brown

2011

Accounting and Business Research

180

112

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Section: What Else May Be Necessary To Achieve Maximum Benefits From mentioning

confidence: 99%

International Financial Reporting Standards: what are the benefits?

Brown

2011

Accounting and Business Research

180

112

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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: 98%

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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“…In one study based on more than 100,000 firm-year observations drawn from 32 countries between 2000, Cai, Rahman and Courtenay (2008 found that the extent of earnings management was declining over time and that it was less prevalent in countries with a stronger enforcement process. In another large cross-country study, Houqe, van Zijl, Dunstan and Karim (2012) found earnings quality had improved in countries with stronger investor protection, including enforcement, after they had adopted IFRS.…”

Section: Enforcementmentioning

confidence: 99%

Some Observations on Research on the Benefits to Nations of Adopting IFRS

Brown

2013

TJAR

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This paper has three aims: to summarise, brief ly, key findings of research on the benefits of adopting International Financial Reporting Standards (IFRS); to highlight some of the more challenging aspects of this research; and to identify opportunities for future research. In order to fulfil these aims, I address five related questions: What is the role of accounting standards in an economy? What reasons have been given by governments, their advisors, and their respective business communities for switching from domestic accounting standards to IFRS? What benefits have been reported following the change to IFRS? What else will help to maximise any benefits from adopting IFRS? And how can we researchers do a better job when assessing the benefits from IFRS? JEL Classification: M40; M41; M42; M48

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The Effect of IFRS and its Enforcement on Earnings Management: An International Comparison

Cited by 54 publications

References 12 publications

International Financial Reporting Standards: what are the benefits?

International Financial Reporting Standards: what are the benefits?

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

Some Observations on Research on the Benefits to Nations of Adopting IFRS

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