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International Financial Reporting Standards and the quality of financial statement information

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  • Iatridis, George
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    Abstract

    This study focuses on the adoption of the International Financial Reporting Standards (IFRSs) in the UK and concentrates in the switch from the UK GAAP to IFRSs. The study seeks to determine whether IFRS adoption leads to higher quality accounting numbers. By examining company accounting measures reported under the UK GAAP and IFRSs, the study investigates the earnings management potential under IFRSs. The paper also studies the value relevance of IFRS-based financial statement information. The study indicates that the implementation of IFRSs generally reinforces accounting quality. The findings show that the implementation of IFRSs reduces the scope for earnings management, is related to more timely loss recognition and leads to more value relevant accounting measures. This suggests that less information asymmetry and earnings manipulation would lead to the disclosure of informative and higher quality accounting information and would therefore assist investors in making informed and unbiased judgements.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Review of Financial Analysis.

    Volume (Year): 19 (2010)
    Issue (Month): 3 (June)
    Pages: 193-204

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    Handle: RePEc:eee:finana:v:19:y:2010:i:3:p:193-204

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    Web page: http://www.elsevier.com/locate/inca/620166

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    Keywords: International Financial Reporting Standards Earnings management Value relevance;

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    Cited by:
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    2. Cătălina Gorgan & Vasile Gorgan & Valentin Florentin Dumitru & Ileana Cosmina Pitulice, 2012. "The Evolution of the Accounting Practices During the Recent Economic Crisis: Empirical Survey Regarding the Earnings Management," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(32), pages 550-562, June.
    3. Kousenidis, Dimitrios V. & Ladas, Anestis C. & Negakis, Christos I., 2013. "The effects of the European debt crisis on earnings quality," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 351-362.
    4. Papadamou, Stephanos & Tzivinikos, Trifon, 2013. "The risk relevance of International Financial Reporting Standards: Evidence from Greek banks," International Review of Financial Analysis, Elsevier, vol. 27(C), pages 43-54.
    5. Valentin BURCA, 2013. "Bankruptcy Risk in IFRS Era. Case Study on BSE Companies," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 3, pages 61-70.
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    7. 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.
    8. Mihaela-Cristina ONICA, 2012. "The Impact of the Application of IFRS on Reporting the Financial Position," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 335-340.
    9. Mahmoud Moeinadin & Forough Heirany & Ehsan Khoshnood, 2014. "The Impact of Information Risk on the Systematic Risk," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(1), pages 90-98, January.
    10. Mahmoud Moeinadin & Forough Heirany & Ehsan Khoshnood, 2013. "Impact of Information Risk on the Liquidity Risk of the Firms Listed on the Tehran Stock Exchange," 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. 3(4), pages 300-307, October.
    11. Bozos, Konstantinos & Ratnaike, Yasanji C. & Alsharairi, Malek, 2014. "How has the international harmonization of financial reporting standards affected merger premiums within the European Union?," International Review of Financial Analysis, Elsevier, vol. 31(C), pages 48-60.

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