IDEAS home Printed from https://ideas.repec.org/a/eee/accoun/v48y2013i4p525-547.html
   My bibliography  Save this article

Russian Accounting System: Value Relevance of Reported Information and the IFRS Adoption Perspective

Author

Listed:
  • Kim, Oksana

Abstract

In this paper I perform an empirical investigation into the value relevance of information reported by Russian public firms from two distinct perspectives. First, I document that prior to 2011, investors relied on information incorporated in the book value of equity. The value relevance of reported earnings, however, is different for “growth” versus “value” stocks. Second, I document that Russian leading firms listed on the London Stock Exchange that report in accordance with IFRS produce more value-relevant reports compared to their local peers that report under the Russian standards. This suggests that the mandatory IFRS adoption in Russia that will be completed by 2015 is likely to result in improved information quality.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:accoun:v:48:y:2013:i:4:p:525-547
    DOI: 10.1016/j.intacc.2013.10.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0020706313001088
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.intacc.2013.10.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Doidge, Craig & Karolyi, G. Andrew & Stulz, Rene M., 2004. "Why are foreign firms listed in the U.S. worth more?," Journal of Financial Economics, Elsevier, vol. 71(2), pages 205-238, February.
    2. Fama, Eugene F & French, Kenneth R, 1992. "The Cross-Section of Expected Stock Returns," Journal of Finance, American Finance Association, vol. 47(2), pages 427-465, June.
    3. Lakonishok, Josef & Shleifer, Andrei & Vishny, Robert W, 1994. "Contrarian Investment, Extrapolation, and Risk," Journal of Finance, American Finance Association, vol. 49(5), pages 1541-1578, December.
    4. Easton, Pd & Harris, Ts, 1991. "Earnings As An Explanatory Variable For Returns," Journal of Accounting Research, Wiley Blackwell, vol. 29(1), pages 19-36.
    5. Karampinis, Nikolaos I. & Hevas, Dimosthenis L., 2011. "Mandating IFRS in an Unfavorable Environment: The Greek Experience," The International Journal of Accounting, Elsevier, vol. 46(3), pages 304-332, September.
    6. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 2000. "Investor protection and corporate governance," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 3-27.
    7. Goriaev, Alexei & Zabotkin, Alexei, 2006. "Risks of investing in the Russian stock market: Lessons of the first decade," Emerging Markets Review, Elsevier, vol. 7(4), pages 380-397, December.
    8. Alali, Fatima A. & Foote, Paul Sheldon, 2012. "The Value Relevance of International Financial Reporting Standards: Empirical Evidence in an Emerging Market," The International Journal of Accounting, Elsevier, vol. 47(1), pages 85-108.
    9. Mary E. Barth & Wayne R. Landsman & Mark H. Lang, 2008. "International Accounting Standards and Accounting Quality," Journal of Accounting Research, Wiley Blackwell, vol. 46(3), pages 467-498, June.
    10. Naomi Soderstrom & Kevin Jialin Sun, 2007. "IFRS Adoption and Accounting Quality: A Review," European Accounting Review, Taylor & Francis Journals, vol. 16(4), pages 675-702.
    11. Laura Márquez-Ramos, 2011. "European Accounting Harmonization: Consequences of IFRS Adoption on Trade in Goods and Foreign Direct Investments," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(0), pages 42-57, September.
    12. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," Journal of Finance, American Finance Association, vol. 52(3), pages 1131-1150, July.
    13. Loughran, Tim, 1997. "Book-to-Market across Firm Size, Exchange, and Seasonality: Is There an Effect?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 32(3), pages 249-268, September.
    14. Ray Ball, 2006. "International Financial Reporting Standards (IFRS): pros and cons for investors," Accounting and Business Research, Taylor & Francis Journals, vol. 36(S1), pages 5-27.
    15. Samir El-Gazzar & Zakaria El-Sadek, 2001. "The value relevance of accounting information in thin and emerging capital markets: The case of Egypt's equity market," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 7(3), pages 368-368, August.
    16. Joos, P & Lang, M, 1994. "The Effects Of Accounting Diversity - Evidence From The European-Union," Journal of Accounting Research, Wiley Blackwell, vol. 32, pages 141-168.
    17. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    18. Ball, Ray & Kothari, S. P. & Robin, Ashok, 2000. "The effect of international institutional factors on properties of accounting earnings," Journal of Accounting and Economics, Elsevier, vol. 29(1), pages 1-51, February.
    19. Francis, J & Schipper, K, 1999. "Have financial statements lost their relevance?," Journal of Accounting Research, Wiley Blackwell, vol. 37(2), pages 319-352.
    20. Leuz, C & Verrecchia, RE, 2000. "The economic consequences of increased disclosure," Journal of Accounting Research, Wiley Blackwell, vol. 38, pages 91-124.
    21. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 1998. "Relative valuation roles of equity book value and net income as a function of financial health," Journal of Accounting and Economics, Elsevier, vol. 25(1), pages 1-34, February.
    22. Ball, Ray & Robin, Ashok & Wu, Joanna Shuang, 2003. "Incentives versus standards: properties of accounting income in four East Asian countries," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 235-270, December.
    23. Cramer, J. S., 1987. "Mean and variance of R2 in small and moderate samples," Journal of Econometrics, Elsevier, vol. 35(2-3), pages 253-266, July.
    24. Assenso-Okofo, Oheneba & Ali, Muhammad Jahangir & Ahmed, Kamran, 2011. "The Development of Accounting and Reporting in Ghana," The International Journal of Accounting, Elsevier, vol. 46(4), pages 459-480.
    25. Holger Daske & Luzi Hail & Christian Leuz & Rodrigo Verdi, 2008. "Mandatory IFRS Reporting around the World: Early Evidence on the Economic Consequences," Journal of Accounting Research, Wiley Blackwell, vol. 46(5), pages 1085-1142, December.
    26. Ball, Ray & Kothari, S. P. & Robin, Ashok, 2000. "Corrigendum to "The effect of international institutional factors on properties of accounting earnings"; [Journal of Accounting and Economics 29 (2000) 1-51]," Journal of Accounting and Economics, Elsevier, vol. 30(2), pages 241-241, October.
    27. Krivogorsky, Victoria, 2000. "Corporate Ownership and Governance in Russia," The International Journal of Accounting, Elsevier, vol. 35(3), pages 331-353, September.
    28. Prather-Kinsey, Jenice, 2006. "Developing countries converging with developed-country accounting standards: Evidence from South Africa and Mexico," The International Journal of Accounting, Elsevier, vol. 41(2), pages 141-162.
    29. Fama, Eugene F & French, Kenneth R, 1995. "Size and Book-to-Market Factors in Earnings and Returns," Journal of Finance, American Finance Association, vol. 50(1), pages 131-155, March.
    30. Abdel-khalik, A. Rashad & Wong, Kie Ann & Wu, Annie, 1999. "The Information Environment of China's A and B Shares: Can We Make Sense of the Numbers?," The International Journal of Accounting, Elsevier, vol. 34(4), pages 467-489, 010.
    31. Ali, A & Hwang, LS, 2000. "Country-specific factors related to financial reporting and the value relevance of accounting data," Journal of Accounting Research, Wiley Blackwell, vol. 38(1), pages 1-21.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maigoshi, Zaharaddeen Salisu & Latif, Rohaida Abdul & Kamardin, Hasnah, 2018. "Change in value-relevance of disclosed RPT across accounting regimes: Evidence from Malaysia," Research in International Business and Finance, Elsevier, vol. 44(C), pages 422-433.
    2. Kim, Oksana, 2016. "The IFRS Adoption Reform through the Lens of Neoinstitutionalism: The Case of the Russian Federation," The International Journal of Accounting, Elsevier, vol. 51(3), pages 345-362.
    3. Tatiana Dolgikh, 2017. "Does the Auditor Have a Direct Influence on the Financial Statement Quality?," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2017(2), pages 73-90.
    4. Nadia Sbei Trabelsi & Mohamed Trabelsi, 2014. "The Value Relevance of IFRS in the UAE Banking Industry: Empirical Evidence from Dubai Financial Market, 2008-2013," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(4), pages 60-71, October.
    5. Golubeva, Olga, 2023. "Accounting for transition: A literature review," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 51(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kim, Oksana, 2016. "The IFRS Adoption Reform through the Lens of Neoinstitutionalism: The Case of the Russian Federation," The International Journal of Accounting, Elsevier, vol. 51(3), pages 345-362.
    2. Karampinis, Nikolaos I. & Hevas, Dimosthenis L., 2011. "Mandating IFRS in an Unfavorable Environment: The Greek Experience," The International Journal of Accounting, Elsevier, vol. 46(3), pages 304-332, September.
    3. Isidro, Helena & Raonic, Ivana, 2012. "Firm incentives, institutional complexity and the quality of “harmonized” accounting numbers," The International Journal of Accounting, Elsevier, vol. 47(4), pages 407-436.
    4. Alali, Fatima A. & Foote, Paul Sheldon, 2012. "The Value Relevance of International Financial Reporting Standards: Empirical Evidence in an Emerging Market," The International Journal of Accounting, Elsevier, vol. 47(1), pages 85-108.
    5. Günther, Nina & Gegenfurtner, Bernhard & Kaserer, Christoph & Achleitner, Ann-Kristin, 2009. "International financial reporting standards and earnings Quality: the myth of voluntary vs. mandatory adoption," CEFS Working Paper Series 2009-09, Technische Universität München (TUM), Center for Entrepreneurial and Financial Studies (CEFS).
    6. Keryn Chalmers & Greg Clinch & Jayne M Godfrey, 2011. "Changes in value relevance of accounting information upon IFRS adoption: Evidence from Australia," Australian Journal of Management, Australian School of Business, vol. 36(2), pages 151-173, August.
    7. Macías, Marta & Muiño, Flora, 2011. "Examining dual accounting systems in Europe," The International Journal of Accounting, Elsevier, vol. 46(1), pages 51-78, March.
    8. da Silva, Ricardo Luiz Menezes & Nardi, Paula Carolina Ciampaglia, 2017. "Full adoption of IFRSs in Brazil: Earnings quality and the cost of equity capital," Research in International Business and Finance, Elsevier, vol. 42(C), pages 1057-1073.
    9. Chan, Ann L.-C. & Hsu, Audrey W.-H. & Lee, Edward, 2015. "Mandatory adoption of IFRS and timely loss recognition across Europe: The effect of corporate finance incentives," International Review of Financial Analysis, Elsevier, vol. 38(C), pages 70-82.
    10. De George, Emmanuel T. & Li, Xi & Shivakumar, Lakshmanan, 2016. "A review of the IFRS adoption literature," LSE Research Online Documents on Economics 67599, London School of Economics and Political Science, LSE Library.
    11. Akisik, Orhan, 2020. "The impact of financial development, IFRS, and rule of LAW on foreign investments: A cross-country analysis," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 815-838.
    12. Juana Aledo Martínez & Diego Abellán Martínez & Henghsiu Lin, 2014. "The Value Relevance of Accounting Numbers Under International Financial Reporting Standards," Australian Accounting Review, CPA Australia, vol. 24(3), pages 237-254, September.
    13. Emmanuel T. De George & Xi Li & Lakshmanan Shivakumar, 2016. "A review of the IFRS adoption literature," Review of Accounting Studies, Springer, vol. 21(3), pages 898-1004, September.
    14. Liao, Lin & Yao, Daifei (Troy) & Kang, Helen & Morris, Richard D., 2020. "The impact of legal efficacy on value relevance of the three-level fair value measurement hierarchy," Pacific-Basin Finance Journal, Elsevier, vol. 59(C).
    15. Goncharov, Igor & Werner, Joerg R. & Zimmermann, Jochen, 2009. "Legislative demands and economic realities: Company and group accounts compared," The International Journal of Accounting, Elsevier, vol. 44(4), pages 334-362, December.
    16. Maigoshi, Zaharaddeen Salisu & Latif, Rohaida Abdul & Kamardin, Hasnah, 2018. "Change in value-relevance of disclosed RPT across accounting regimes: Evidence from Malaysia," Research in International Business and Finance, Elsevier, vol. 44(C), pages 422-433.
    17. Abdulrahman Alomair & Alan Farley & Helen Hong Yang, 2022. "The impact of IFRS adoption on the value relevance of accounting information in Saudi Arabia," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2839-2878, June.
    18. El-Helaly, Moataz & Ntim, Collins G. & Al-Gazzar, Manar, 2020. "Diffusion theory, national corruption and IFRS adoption around the world," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 38(C).
    19. Houqe, Muhammad Nurul & van Zijl, Tony & Dunstan, Keitha & Karim, A.K.M. Waresul, 2012. "The Effect of IFRS Adoption and Investor Protection on Earnings Quality Around the World," The International Journal of Accounting, Elsevier, vol. 47(3), pages 333-355.
    20. Ioannis Tsalavoutas & Paul André & Lisa Evans, 2009. "Transition to IFRS and value relevance in a small but developed market: A look at Greek evidence," Post-Print halshs-00460532, HAL.

    More about this item

    Keywords

    International Financial Reporting Standards (IFRS); Russian Accounting Standards (RAS); Value relevance; Accounting quality;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:accoun:v:48:y:2013:i:4:p:525-547. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620179 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.