Value relevance of financial statements in convergence with IFRS: analyses in the abnormal pricing error method

Wu, TsingZai C.; Hsieh, Wan Ting; Yu, Chun Chan; Chu, Hsin

doi:10.1080/13504851.2016.1205714

Cited by 9 publications

(9 citation statements)

References 6 publications

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“…This study result is consistent with the findings of the study of Zhou et al (2009) who find that firms adopting IFRS are less likely to smooth earnings than firms adopting Chinese GAAP. In addition, they didn't find adopting firms engaging in a more timely loss recognition which is consistent with Kwon et al (2017), who documents lower earnings management in Korea after IFRS adoption, and Wu et al (2017), who find that adopting IFRS in Taiwan does not lead to further increases in value relevance of financial reporting. The results support the findings of many other studies such as Eccher and Healy (2000), Van der Meulen et al (2007) and Lin et al (2012).…”

Section: Value Relevancesupporting

confidence: 53%

“…Where P it is the share price three months after fiscal year end t, X it is earnings per share, DX is a dummy variable equal to one if earnings are negative or zero otherwise and BV i,t-1 is the book value per share at the beginning of period t, It should be noted that the coefficient of earnings, β1, reflects the pricing effect of current earnings. The measure of value relevance is based on the adjusted R 2 of the model which examines the explanatory power of accounting information over years (Wu et al, 2017).…”

Section: Value Relevancementioning

confidence: 99%

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2019

AJBE

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Section: Value Relevancesupporting

confidence: 53%

Section: Value Relevancementioning

confidence: 99%

Untitled

2019

AJBE

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“…Distinct factors that also affect the materialization of expected IFRS adoption benefits are, among others, the alignment between financial accounting and tax accounting (Alford, Jones, Leftwich, & Zmijewski, 1993), U.S.A. cross-listings (Cormier & Magnan, 2016), the level of shareholder protection (Houqe, Van Zijl, Dunstan, & Karim, 2012;Hung, 2001), managerial ability (Francis et al, 2020), and the quality of previous local accounting standards. Regarding the latter, in a recent study of firms listed on the Taiwan Stock Exchange (TWSE or TAIEX), Wu, Hsieh, Yu, and Chu (2016) employed the Ohlson Model to test value relevance in an economy that already had quality standards before the application of IFRS (for example, Taiwan regulators used to follow the U.S. GAAP) and those authors conclude that, for a country that already has a set of high-quality accounting standards, convergence with IFRS cannot significantly improve the value relevance of financial statements.…”

Section: Literature Reviewmentioning

confidence: 99%

The influence of mandatory adoption of IFRS in Argentina on value relevance of accounting information

Roca

2021

Journal of Applied Economics

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This study investigates the effect of mandatory adoption of International Financial Reporting Standards (IFRS) on the value relevance of accounting information in Argentina, which originated via the regulation that required all public non-financial companies to change the accounting standards, for fiscal periods starting in January 2012. As with most value-relevance studies, this research employs the Ohlson Model to examine the empirical association between equity prices and two main accounting variables: Net Earnings (representing the Income Statement) and the Book Value of Equity (representing the Balance Sheet). Panel data for 40 companies over a period of 23 years, from quarterly financial reports published by the Buenos Aires Stock Exchange (BCBA), are examined. The reported results suggest that mandatory adoption of IFRS in Argentina does not improve the value relevance of any of the tested variables. On the contrary, after the switch in accounting standards, the accounting numbers present a weaker association with the stock price.

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“…One strategy suggested by Hail, Leuz, and Wysocki (2010) is to adopt a 'country-specific version of IFRS'. According to Wu et. al.…”

Section: Institutional Framework For Financial Reporting In Indiamentioning

confidence: 99%

“…While Tsoligkasa and Tsalavoutas (2011) found no significant changes in value relevance after switching from Greek GAAP to IFRS. In the context of developing countries, Ki, Leem, and Yuk (2019) reported a decline in value relevance in South Korea after IFRS adoption while Wu, Hsieh, Yu, and Chu, (2017) discovered no improvement in value relevance of financial statements post IFRS convergence. This study is motivated as an attempt to add to the existing literature by examining the effects of IFRS convergence on the value relevance of Indian listed firms for the period (2013-2014 to 2018-19) comprising of the pre and post-IFRS convergence periods.…”

Section: Introductionmentioning

confidence: 99%

IFRS Convergence and Value Relevance of Accounting Information: Evidence from Indian Financial Reporting

Gomes¹,

Costa²

2022

IJBS

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International studies have recorded evidences of improved accounting information attributed to the adoption of International Financial Reporting Standards (IFRS). The concurrent literature is however, scant in India. This study is one of the first of its kind to explore value relevance in the context of financial reporting for a large sample in India since IFRS convergence. The paper examines the value relevance of financial reporting of firms listed on the National Stock Exchange (NSE) in India by employing the Ohlson, (1995) Price Model. It aims to identify whether fundamental accounting variables like book value per share (BVPS) and earnings per share (EPS) are more value relevant after the IFRS converged Indian Accounting Standards (IndAS) became mandatory for listed firms. The hypotheses are tested using multivariate panel regressions on the annual data of 910 listed firms from 2013-14 to 2018-19 – resulting in 5460 observations – to include the pre and post mandatory convergence periods. The study documents a statistically significant association between stock prices of our sample firms and their key accounting variables (BVPS and EPS) along with an increase in the explanatory power of the model during the post mandatory convergence period.

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Value relevance of financial statements in convergence with IFRS: analyses in the abnormal pricing error method

Cited by 9 publications

References 6 publications

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The influence of mandatory adoption of IFRS in Argentina on value relevance of accounting information

IFRS Convergence and Value Relevance of Accounting Information: Evidence from Indian Financial Reporting

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