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Does an IFRS adoption increase value relevance and earnings timeliness in Latin America?

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  • Rodríguez García, Martha del Pilar
  • Cortez Alejandro, Klender Aimer
  • Méndez Sáenz, Alma Berenice
  • Garza Sánchez, Héctor Horacio

Abstract

This study analyzes whether changing from local to international accounting standards improves the quality of accounting for Latin American companies. In particular, we aim to identify whether fundamental accounting variables are more relevant and increase earnings timeliness after companies adopt the International Financial Reporting Standards. This research was conducted during 2000–2014 using a sample of 923 companies from Argentina, Brazil, Chile, and Mexico. Employing panel data and quantile regression, our findings show that changes from local accounting regulations to internationally approved standards increase the value relevance. In addition, the results suggest the presence of earnings timeliness in large firms.

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  • Rodríguez García, Martha del Pilar & Cortez Alejandro, Klender Aimer & Méndez Sáenz, Alma Berenice & Garza Sánchez, Héctor Horacio, 2017. "Does an IFRS adoption increase value relevance and earnings timeliness in Latin America?," Emerging Markets Review, Elsevier, vol. 30(C), pages 155-168.
    • Handle: RePEc:eee:ememar:v:30:y:2017:i:c:p:155-168
    DOI: 10.1016/j.ememar.2016.11.001
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    Cited by:

    1. de Moura, André Aroldo Freitas & Altuwaijri, Aljaohra & Gupta, Jairaj, 2020. "Did mandatory IFRS adoption affect the cost of capital in Latin American countries?," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 38(C).
    2. Kimouche Bilal, 2021. "Accounting Reforms And Accounting Quality: Evidence From Algeria," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 27, pages 33-53, June.
    3. Muhammad Mohsin & Mohammad Nurunnabi & Jijian Zhang & Huaping Sun & Nadeem Iqbal & Robina Iram & Qaiser Abbas, 2021. "The evaluation of efficiency and value addition of IFRS endorsement towards earnings timeliness disclosure," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 1793-1807, April.
    4. Mongrut, Samuel & Winkelried, Diego, 2019. "Unintended effects of IFRS adoption on earnings management: The case of Latin America," Emerging Markets Review, Elsevier, vol. 38(C), pages 377-388.
    5. 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.
    6. Shruti, R. & Thenmozhi, M., 2023. "Founder ownership and value relevance of IFRS convergence: Role of institutional investors," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).

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    More about this item

    Keywords

    Earnings timeliness; IFRS; Latin America; Quantile regression; Value relevance;
    All these keywords.

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting

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