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A Meta-analysis of IFRS Adoption Effects

Author

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  • Ahmed, Kamran
  • Chalmers, Keryn
  • Khlif, Hichem

Abstract

The adoption of IFRS around the globe has stimulated empirical research that investigates the financial reporting and capital market effects associated with an accounting regime change. These studies differ in their analysis period, jurisdictional setting, and research design, and they report varying findings. We conduct a meta-analysis of IFRS adoption studies investigating financial reporting effects, namely value relevance and earnings transparency in the form of discretionary accruals, as well as capital market effects, specifically the quality of analysts' earnings forecasts. Our findings show that the value relevance of book value of equity has not increased post-IFRS adoption, whereas the value relevance of earnings has generally increased when assessed using price models. Our results also suggest that discretionary accruals have not reduced, but analysts' forecast accuracy has increased significantly post-IFRS adoption. Our findings are not affected materially after controlling for moderating factors including jurisdictional differences such as legal origin, the accounting and auditing enforcement regime, and differences between domestic GAAP and IFRS. However, these associations are moderated by the model used for empirical investigation of value relevance and discretionary accrual effects; they are also moderated by the adoption being voluntary or mandatory. The findings provide evidence to inform policy assessments and deliberations of the financial reporting and capital market effects of adopting IFRS.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:accoun:v:48:y:2013:i:2:p:173-217
    DOI: 10.1016/j.intacc.2013.04.002
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    Cited by:

    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. repec:eee:jiaata:v:30:y:2018:i:c:p:18-31 is not listed on IDEAS
    3. repec:ate:journl:ajbev4i2-4 is not listed on IDEAS
    4. Voulgaris, Georgios & Stathopoulos, Konstantinos & Walker, Martin, 2014. "IFRS and the Use of Accounting-Based Performance Measures in Executive Pay," The International Journal of Accounting, Elsevier, vol. 49(4), pages 479-514.
    5. 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.
    6. Masahiro Enomoto, 2018. "Cross-Country Research on Earnings Quality: A Literature Review and Future Opportunities," Discussion Paper Series DP2018-06, Research Institute for Economics & Business Administration, Kobe University.
    7. repec:eco:journ1:2017-04-52 is not listed on IDEAS
    8. repec:hur:ijaraf:v:7:y:2017:i:4:p:71-82 is not listed on IDEAS
    9. Tereza Miková, 2014. "Influence of IFRS on Earnings Manipulation: Evidence from the European Union," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2014(6), pages 3-18.
    10. dos Santos, Marco Aurélio & Fávero, Luiz Paulo Lopes & Distadio, Luiz Fernando, 2016. "Adoption of the International Financial Reporting Standards (IFRS) on companies’ financing structure in emerging economies," Finance Research Letters, Elsevier, vol. 16(C), pages 179-189.
    11. repec:eee:finana:v:61:y:2019:i:c:p:222-232 is not listed on IDEAS
    12. repec:eee:joacli:v:41:y:2018:i:c:p:142-172 is not listed on IDEAS
    13. Florin DOBRE, 2015. "Are financial audit elements and corporate governance policies solutions for the economic crisis?," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(603), S), pages 275-284, Summer.
    14. repec:eee:advacc:v:30:y:2014:i:2:p:338-353 is not listed on IDEAS
    15. repec:agr:journl:v:2(602):y:2015:i:2(602):p:275-284 is not listed on IDEAS
    16. repec:taf:oabmxx:v:3:y:2016:i:1:p:1209100 is not listed on IDEAS
    17. Paulina Sutrisno, 2017. "The Effect of IFRS Convergence on Earnings Quality: Empirical Evidence from Indonesia," GATR Journals afr148, Global Academy of Training and Research (GATR) Enterprise.
    18. Costel Istrate, 2014. "Impact Of Ifrs On The Accounting Numbers Of Romanian Listed Banks," The Journal of Accounting and Management, Danubius University of Galati, issue 2, pages 45-49, August.
    19. repec:eee:jiaata:v:24:y:2015:i:c:p:72-81 is not listed on IDEAS
    20. repec:eee:joacli:v:35:y:2015:i:c:p:1-27 is not listed on IDEAS
    21. repec:eee:jiaata:v:23:y:2014:i:2:p:87-97 is not listed on IDEAS
    22. repec:eee:jiaata:v:33:y:2018:i:c:p:18-39 is not listed on IDEAS
    23. 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.

    More about this item

    Keywords

    Discretionary accruals; Economic consequences; Analysts' forecasts; IFRS; Meta-analysis and value relevance;

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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