What drives the comparability effect of mandatory IFRS adoption?

Cascino, Stefano; Gassen, Joachim

doi:10.1007/s11142-014-9296-5

Cited by 243 publications

(223 citation statements)

References 46 publications

(55 reference statements)

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“…Yip and Young (2012) also used ROA in the same way as calculated in this research. Both in this research and in other studies adopting similar adaptations (Yip & Young, 2012;Lang et al 2010;Cascino & Gassen, 2012;Brochet et al, 2013) no significant bias was noticed in relation to the original measurement by DeFranco et al (2011).…”

Section: Comparability Measurementsupporting

confidence: 58%

“…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%

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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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Section: Comparability Measurementsupporting

confidence: 58%

Section: Comparability Measurementmentioning

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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“…From a study of German IFRS adopting firms, Christensen et al (2015) conclude that when higher quality accounting standards are mandated, accounting quality improvements are only observed in firms with incentives to comply. Cascino and Gassen (2015) study the effect of IFRS adoption on compliance and comparability among German and Italian firms. They conclude that incentives (measured at the firm, region, and country levels) affect compliance and that only firms with high compliance measures experience substantial increases in comparability.…”

Section: Evidence On Incentives Versus Standardsmentioning

confidence: 99%

IFRS – 10 years later

Ball

2016

Accounting and Business Research

139

119

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A decade ago, the near-simultaneous adoption of International Financial Reporting Standards (IFRS) in over 100 countries could fairly have been described as a brave new world in financial reporting. Any systems innovation, and especially an innovation of such importance and magnitude, thrusts those involved (companies, users, and accountants) into the unknown. There was good reason to expect success, based largely on widespread enthusiasm for international standards and, behind that, recognition of the strong forces of globalization. Nevertheless, there were risks involved and there was limited a priori evidence to guide the decision-makers. A decade later, this is still the case. Globalization remains a potent economic and political force, and drives the demand for globalization in accounting. Nevertheless, most political and commercial activity remains local, so adoption of uniform rules does not by itself lead to uniform reporting behavior around the world. For many of the claimed benefits of IFRS adoption to be realized, uniform implementation would have to occur in a wide range of countries, which seems unlikely and requires more than simply creating regulatory enforcement mechanisms. Some evidence of actual outcomes from IFRS adoption has come to light, but, as will be argued below, by and large the evidence to date is not very useful. The IASB's (International Accounting Standards Board) valuation-centric Conceptual Framework leads it to pay little or no heed to the use of accounting information in contracting, despite the lip service recent amendments pay to even the narrower notion of stewardship. So IFRS adoption is an innovation of historical proportions whose worldwide effects remain somewhat uncertain. The essay concludes with comments on the status of China and the US.

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“…To date, most research on IFRS implementation tends to focus on listed firms in European countries (e.g., Murphy 2000, Jaafar and McLeay 2007, Yip and Young 2012, Cascino and Gassen 2015. This study attempts to address this gap in the literature by investigating IFRS implementation focus ing on goodwill impairment by listed firms in Singapore, a developed country that belong to the Association of South East Asian Nations (ASEAN).…”

mentioning

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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What drives the comparability effect of mandatory IFRS adoption?

Cited by 243 publications

References 46 publications

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

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

IFRS – 10 years later

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

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