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Mandatory adoption of IFRS in Latin America: A boon or a bias

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  • de Moura, André Aroldo Freitas
  • Gupta, Jairaj

Abstract

Exploiting the unique feature that Latin American countries have not undergone a significant change to the enforcement of accounting standards and investor protection mechanisms, we investigate whether mandatory adoption of IFRS and firm-level reporting incentives improve analysts’ information environment in Latin American countries (Argentina, Brazil, Chile, Mexico and Peru), and whether the precision of public, private and consensus information improve after IFRS adoption. Test results show that mandatory adoption of IFRS and firm-level reporting incentives improve analysts’ information environment. Overall, we confirm the positive effects of IFRS adoption, because the precision of public and consensus information is enhanced.

Suggested Citation

  • de Moura, André Aroldo Freitas & Gupta, Jairaj, 2019. "Mandatory adoption of IFRS in Latin America: A boon or a bias," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 60(C), pages 111-133.
    • Handle: RePEc:eee:intfin:v:60:y:2019:i:c:p:111-133
    DOI: 10.1016/j.intfin.2018.12.016
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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. Flauzeliton José Aparecido Gonçalves & André Aroldo Freitas De Moura & Fabio Yoshio Suguri Motoki, 2022. "What influences the implementation of IFRS for SMEs? The Brazilian case," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2947-2992, June.

    More about this item

    Keywords

    IFRS; Analysts’ information environment; Forecast accuracy; Target price forecast dispersion; Investor protection mechanisms;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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