The impact of mandatory IFRS adoption on foreign mutual fund ownership: The role of comparability

DeFond, Mark L.; Hu, Xuesong; Hung, Mingyi; Li, Siqi

doi:10.1016/j.jacceco.2011.02.001

Cited by 550 publications

(428 citation statements)

References 29 publications

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“…De Fond, Hu, Hung, and Li (2011) [18] • Examine the effect of adopting a uniform set of accounting standards like the mandatory IFRS adoption on comparability and cross-border investment.…”

Section: The Effect Of Ifrs Adoption On Investment Management Worldwidementioning

confidence: 99%

The Effect of IFRS Adoption on Investment Management: A Review of the Literature

Kapellas¹,

Siougle²

2018

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Recent literature contains a number of studies that provide evidence that improvements in the performance related to business investments are associated with the main positive results of the implementation of international financial reporting standards (hear after IFRS). This study is an effort trying to summarize empirical evidences in current literature about the effect of the IFRS adoption on investment management. We summarize literature on the effect of IFRS a) in a European setting b) in a worldwide setting. We especially refer to the effect of European Crisis on Investment Management. We summarize evidence on the impact of IFRS adoption worldwide on investments assets, foreign direct investments (FDIs), cross boarder investments (Merger and Acquisition activities) and foreign mutual fund ownership. We finally present some evidence on the impact of IFRS adoption on US home bias and try to document the impact of IFRS adoption on international listing and IPOS in global markets.

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Section: The Effect Of Ifrs Adoption On Investment Management Worldwidementioning

confidence: 99%

The Effect of IFRS Adoption on Investment Management: A Review of the Literature

Kapellas¹,

Siougle²

2018

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“…Nevertheless, an improvement in financial statements comparability does not depend entirely on the application of a uniform set of accounting standards (DeFond et al 2011). Factors such as firms' reporting incentives, the level of discretion afforded by specific accounting standards and the strength of regulatory enforcement of the standards may impact the comparability of the financial statements (Ball et al 2003, Daske et al 2008.…”

Section: Prior Literature and Hypotheses Developmentmentioning

confidence: 99%

Audit Committee Independence and a Contracting Perspective on Goodwill Impairment: Singaporean Evidence

Majid

2017

Business: Theory and Practice

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Abstract. This study examines factors influencing and constraining the decision to recognize zero goodwill impairment in a sample of 52 Singaporean listed firms from 2010-2012. Using binary logistic regressions, the results reveal that firms that are approaching violation of their debt covenants have a higher likelihood of exercising the recognition choice, while a higher proportion of audit committee independence constrains this choice. The policy implication of this study is that to improve the quality of the financial statements, the relevant authorities need to monitor firms' reporting incentives closely. This study contributes to the literature on IFRS by providing evidence that supports the applicability of the debt hypothesis in explaining the decision of Singaporean listed firms to recognize zero goodwill impairment.

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“…As a measurement of output, the comparability obtained by means of this model has some advantages, such as increased robustness in statistical analysis, lower bias of the researcher, and higher reliability in data collection. Moreover, it was widely used in recent studies on the theme (DeFranco et al, 2011;DeFond et al, 2011;Barth, Landsman, Lang & Williams, 2012;Brochet, Jagolinzer & Riedl, 2013;Lang, Maffett & Owens, 2010;Fang, Li, Xin & Zhang, 2012;Neel, 2013;Peterson, Schmardebeck & Wilks, 2012;Yip & Young, 2012;Barth et al, 2013;Sohn, 2011;Cascino & Gassen, 2012;Kim, Kraft & Ryan 2013), and this already guarantees an external validation to it.…”

Section: Comparability Measurementmentioning

confidence: 99%

“…there is no use in the foreign markets gaining an advantage in the allocation of capital if such a gain occurs at the expense of greater deficiency in the resource allocation process within this economy. The question is whether the gain in external comparability (between countries) empirically proved by some studies (Yip & Young, 2012;DeFond, Hu, Hung & Li 2011;Barth, Landsman, Lang & Williams, 2013) occurs at the expense of decreased internal comparability (between companies in the same country -within country) generated by regulatory flexibility. To answer these practical questions, there is a need to examine how the regulatory flexibility process can impact comparability.…”

Section: Introductionmentioning

confidence: 99%

Manager's Discretionary Power and Comparability of Financial Reports: An Analysis of the Regulatory Transition Process in Brazilian Accounting

Ribeiro

Carmo

Fávero

et al. 2016

Rev. contab. finanç.

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This research aimed to directly evaluate the impact of the accounting regulatory flexibility movement on the comparability of financial reports. The country chosen for the analysis was Brazil, because it was one of the few countries in the world where a process of regulatory change from a completely rule-based standard with a strong link to tax accounting (Lopes, 2011) to a principle-based standard with greater need for decision by managers who prepare the financial reports took place. To measure comparability, the accounting function similarity model developed by DeFranco, Kothari and Verdi (2011) was used. The companies analyzed were all listed ones with full data for the period concerned having, at least, a pair company within the same economic activity sector. To obtain the research results, we adopted a panel data model where the years 2005 to 2012 were compared to the year 2004. The results obtained prove that, on average, there was no significant decrease in the comparability level within country during the regulatory transition period in Brazil. On the contrary, there was an increase in genuine comparability in the year 2012 when compared to 2004. In the model adjusted by stepwise, the years 2011 and 2012 had a significantly higher average comparability when compared to 2004. The results found corroborate other researches addressing the quality of accounting information (Collins, Pasewark, & Riley, 2012;Psaros & Trotman, 2004;Agoglia, Doupnik, & Tsakumis, 2011) and prove the superiority of the principle-based standard also over the comparability of financial reports. The main conclusion of this research is that increasing manager's discretionary power through flexibility of accounting standards does not decrease the comparability of financial reports.

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The impact of mandatory IFRS adoption on foreign mutual fund ownership: The role of comparability

Cited by 550 publications

References 29 publications

The Effect of IFRS Adoption on Investment Management: A Review of the Literature

The Effect of IFRS Adoption on Investment Management: A Review of the Literature

Audit Committee Independence and a Contracting Perspective on Goodwill Impairment: Singaporean Evidence

Manager's Discretionary Power and Comparability of Financial Reports: An Analysis of the Regulatory Transition Process in Brazilian Accounting

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