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Value relevance of financial statements in convergence with IFRS: analyses in the abnormal pricing error method

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  • TsingZai C. Wu
  • Wan Ting Hsieh
  • Chun Chan Yu
  • Hsin Ti Chu

Abstract

We use an econometrically distinct method to test whether the value relevance of financial statements, especially during convergence with International Financial Reporting Standards (IFRS), has improved in Taiwanese firms in 1990–2011. In contrast to a prior study, our results show that given transformation between two high-quality accounting standards, convergence with IFRS will not lead to further increases in value relevance of financial statements. Our findings may provide implications for international standard-setters and regulators, especially countries undecided about adopting or converging with IFRS.

Suggested Citation

  • TsingZai C. Wu & Wan Ting Hsieh & Chun Chan Yu & Hsin Ti Chu, 2017. "Value relevance of financial statements in convergence with IFRS: analyses in the abnormal pricing error method," Applied Economics Letters, Taylor & Francis Journals, vol. 24(7), pages 490-493, April.
    • Handle: RePEc:taf:apeclt:v:24:y:2017:i:7:p:490-493
    DOI: 10.1080/13504851.2016.1205714
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    References listed on IDEAS

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    1. Mary E. Barth & Wayne R. Landsman & Mark H. Lang, 2008. "International Accounting Standards and Accounting Quality," Journal of Accounting Research, Wiley Blackwell, vol. 46(3), pages 467-498, June.
    2. Zhaoyang Gu, 2007. "Across-sample Incomparability of "R"-super-2s and Additional Evidence on Value Relevance Changes Over Time," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 34(7-8), pages 1073-1098.
    3. Zhaoyang Gu, 2007. "Across‐sample Incomparability of R2s and Additional Evidence on Value Relevance Changes Over Time," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 34(7‐8), pages 1073-1098, September.
    4. Collins, Daniel W. & Maydew, Edward L. & Weiss, Ira S., 1997. "Changes in the value-relevance of earnings and book values over the past forty years," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 39-67, December.
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    1. Wafaa Salah & Abdallah Abdel-Salam, 2019. "The Effects of International Financial Reporting Standards on Financial Reporting Quality," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 5(3), pages 221-242, July.

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