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Earnings Quality and IFRS Research in Africa: Recent Evidence, Issues and Future Direction

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  • Ozili, P K

Abstract

This paper review the recent empirical research on IFRS and earnings quality among African studies and show mixed conclusions regarding the impact of IFRS on earnings quality and financial reporting quality in the region. Also, some discussions on factors that led to the growth in the earnings quality African literature over the last decade as well as some challenges in the recent literature, are provided. Also, the study makes several observations regarding IFRS and earnings quality research in Africa and suggests potential directions for future research. The need to (i) understand the recent direction of earnings quality research in Africa, (ii) understand the interaction between policy and earnings quality research, if any, in the African region, and (iii) the need to maintain high-level rigour in earnings quality research while ensuring greater interaction between policy and research, makes this study important. Given the paucity of research on earnings quality in developing countries, this study contributes to the broader earnings quality literature by providing a review of the African earnings quality literature; hence, conclusions based on empirical studies in this review are not intended to be generalised to developed countries but only to developing countries. Finally, while insights in this paper may be informative to the reader, the intended objective is to stimulate debates that would improve the outputs of earnings quality research and the overall quality of accounting disclosure among firms in Africa.

Suggested Citation

  • Ozili, P K, 2016. "Earnings Quality and IFRS Research in Africa: Recent Evidence, Issues and Future Direction," MPRA Paper 73905, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:73905
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    File URL: https://mpra.ub.uni-muenchen.de/73905/1/MPRA_paper_73905.pdf
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    References listed on IDEAS

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    1. Peter F. Pope & Stuart J. McLeay, 2011. "The European IFRS experiment: objectives, research challenges and some early evidence," Accounting and Business Research, Taylor & Francis Journals, vol. 41(3), pages 233-266, August.
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    4. Fudenberg, Drew & Tirole, Jean, 1995. "A Theory of Income and Dividend Smoothing Based on Incumbency Rents," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 75-93, February.
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    6. Ulf Br&?ggemann & J?rg-Markus Hitz & Thorsten Sellhorn, 2013. "Intended and Unintended Consequences of Mandatory IFRS Adoption: A Review of Extant Evidence and Suggestions for Future Research," European Accounting Review, Taylor & Francis Journals, vol. 22(1), pages 1-37, May.
    7. Patricia M. Dechow & Scott A. Richardson & Richard G. Sloan, 2008. "The Persistence and Pricing of the Cash Component of Earnings," Journal of Accounting Research, Wiley Blackwell, vol. 46(3), pages 537-566, June.
    8. Dechow, Patricia & Ge, Weili & Schrand, Catherine, 2010. "Understanding earnings quality: A review of the proxies, their determinants and their consequences," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 344-401, December.
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    15. Ozili, Peterson K, 2015. "Loan Loss Provisioning, Income Smoothing, Signaling, Capital Management and Procyclicality: Does IFRS Matter? Empirical Evidence from Nigeria," MPRA Paper 68350, University Library of Munich, Germany.
    16. DeFond, Mark L., 2010. "Earnings quality research: Advances, challenges and future research," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 402-409, December.
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    More about this item

    Keywords

    Earnings quality; Standard setting; Earnings management; IFRS adoption; Accounting quality; Disclosure regulation.;

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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