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The Effect of IFRS Adoption and Investor Protection on Earnings Quality Around the World

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  • Houqe, Muhammad Nurul
  • van Zijl, Tony
  • Dunstan, Keitha
  • Karim, A.K.M. Waresul
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    Abstract

    This study examines the effects of mandatory IFRS adoption and investor protection on the quality of accounting earnings in forty-six countries around the globe. The results suggest that earnings quality increases for mandatory IFRS adoption when a country's investor protection regime provides stronger protection. This study extends the current literature that shows that accounting practices are influenced by country-level macro settings. The results highlight the importance of investor protection for financial reporting quality and the need for regulators to design mechanisms that limit managers' earnings management practices.

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    Bibliographic Info

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

    Volume (Year): 47 (2012)
    Issue (Month): 3 ()
    Pages: 333-355

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    Handle: RePEc:eee:accoun:v:47:y:2012:i:3:p:333-355

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

    Related research

    Keywords: Earnings quality; Discretionary accruals; Accruals quality; Earnings persistence; Micro governance; Macro governance;

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    Cited by:
    1. Ahmed, Kamran & Chalmers, Keryn & Khlif, Hichem, 2013. "A Meta-analysis of IFRS Adoption Effects," The International Journal of Accounting, Elsevier, vol. 48(2), pages 173-217.

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