Abstract

http://ssrn.com/abstract=1013054
 
 

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Incentives or Standards: What Determines Accounting Quality Changes Around IFRS Adoption?


Hans Bonde Christensen


University of Chicago - Booth School of Business

Edward Lee


University of Manchester - Manchester Business School

Martin Walker


University of Manchester - Manchester Business School

March 6, 2008

AAA 2008 Financial Accounting and Reporting Section (FARS) Paper

Abstract:     
We examine the impact of incentives on accounting quality changes around IFRS adoption. In particular, we examine earnings management and timely loss recognition, constructs often used to assess accounting standards quality. While existing literature documents accounting quality improvements following IFRS adoption, we find that improvements are confined to firms with incentives to adopt. Further, we find that firms that resist IFRS have closer connections with banks and inside shareholders, which could explain these firms' lack of incentives to adopt IFRS. The overall results indicate that incentives dominate accounting standards in determining accounting quality.

Number of Pages in PDF File: 41

Keywords: IFRS, IAS, accounting quality, incentives, international accounting, regulation, standard setting

JEL Classification: G15, G18, G29, M41, M43, M44, M47

working papers series


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Date posted: September 10, 2007 ; Last revised: March 14, 2008

Suggested Citation

Christensen, Hans Bonde and Lee, Edward and Walker, Martin, Incentives or Standards: What Determines Accounting Quality Changes Around IFRS Adoption? (March 6, 2008). AAA 2008 Financial Accounting and Reporting Section (FARS) Paper. Available at SSRN: http://ssrn.com/abstract=1013054 or http://dx.doi.org/10.2139/ssrn.1013054

Contact Information

Hans Bonde Christensen (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 South Woodlawn Avenue
Chicago, IL 60637
United States

Chicago Booth School of Business Logo

Edward Lee
University of Manchester - Manchester Business School ( email )
Oxford Road
Manchester, M13 9PL
United Kingdom
Martin Walker
University of Manchester - Manchester Business School ( email )
Booth Street West
Manchester, M15 6PB
United Kingdom
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