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The impact of IFRS on financial report quality in Latin America and the Caribbean

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  • Juan Camilo Cardona Montoya

    (Universidad de San Buenaventura - Medellín, Colombia)

Abstract

This paper examines the impact generated for the application of International Financial Reporting Standards (IFRS) on financial report quality (accounting quality) for Latin American and Caribbean economies, by using five measurement proxies related to the magnitude of absolute discretionary accruals; accounting quality is assessed during the periods 2006 to 2014. At the same time, the effects of institutional factors and management incentives on the use of such accruals are examined as a mechanism for earnings management. The results show that during the period of application of IFRS, companies report lower magnitude of absolute discretionary accruals, indicating an inverse relationship between these two variables; these results suggest less earnings management, which is the same as higher financial report quality. It is intended to contribute to the literature by presenting generalized findings for the Latin and Caribbean region, by including in this study the majority of countries of the region over a wide period of application of IFRS, in addition to using different measurement metrics to give greater robustness to the findings.

Suggested Citation

  • Juan Camilo Cardona Montoya, 2018. "The impact of IFRS on financial report quality in Latin America and the Caribbean," Contaduría y Administración, Accounting and Management, vol. 63(2), pages 13-14, Junio.
    • Handle: RePEc:nax:conyad:v:63:y:2018:i:2:p:13-14
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    References listed on IDEAS

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    1. Zhang, Yuyang & Uchida, Konari & Bu, Hua, 2013. "How do accounting standards and insiders' incentives affect earnings management? Evidence from China," Emerging Markets Review, Elsevier, vol. 16(C), pages 78-99.
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    Cited by:

    1. Hung Chi Chen & Hsiang-Tsai Chiang & Dessy Voren, 2023. "The Impact of the COVID-19 Pandemic on Quality of Financial Reports," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 13(4), pages 1-1.
    2. 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.

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