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Mandating IFRS in an Unfavorable Environment: The Greek Experience

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  • Karampinis, Nikolaos I.
  • Hevas, Dimosthenis L.

Abstract

There is an ongoing debate concerning the efficacy of mandating high-quality accounting standards in unfavorable economies with inadequate institutional infrastructures. Greece provides us with an example of an unfavorable jurisdiction for enforcement of International Financial Reporting Standards (IFRS) due to its code-law tradition, bank orientation, concentrated corporate ownership, poor shareholders' protection, and low regulatory quality. Assuming that these conditions undermine managers' and auditors' incentives for high-quality financial reporting, how likely is it that mandating IFRS in such an environment will be effective? To address this research question, we explore potential effects of IFRS enforcement on two salient properties of accounting income: value relevance and conditional conservatism. Our results indicate only minor improvements in both of them after IFRS implementation.

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Bibliographic Info

Article provided by Elsevier in its journal The International Journal of Accounting.

Volume (Year): 46 (2011)
Issue (Month): 3 (September)
Pages: 304-332

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Handle: RePEc:eee:accoun:v:46:y:2011:i:3:p:304-332

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Web page: http://www.elsevier.com/locate/inca/620179

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Keywords: IFRS Reporting incentives Value relevance Conditional conservatism Greece;

References

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Cited by:
  1. Palea, Vera, 2013. "IAS/IFRS and Financial Reporting Quality: Lessons from the European Experience," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201330, University of Turin.
  2. Kim, Oksana, 2013. "Russian Accounting System: Value Relevance of Reported Information and the IFRS Adoption Perspective," The International Journal of Accounting, Elsevier, vol. 48(4), pages 525-547.
  3. Karampinis, Nikolaos I. & Hevas, Dimosthenis L., 2013. "Effects of IFRS Adoption on Tax-induced Incentives for Financial Earnings Management: Evidence from Greece," The International Journal of Accounting, Elsevier, vol. 48(2), pages 218-247.
  4. Philip Brown, 2011. "International Financial Reporting Standards: what are the benefits?," Accounting and Business Research, Taylor & Francis Journals, vol. 41(3), pages 269-285, August.

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