Are IFRS-based and US GAAP-based Accounting Amounts Comparable?
Mary E. Barth
Stanford University - Graduate School of Business
Wayne R. Landsman
University of North Carolina Kenan-Flagler Business School
Mark H. Lang
University of North Carolina at Chapel Hill
Christopher D. Williams
University of Michigan, Stephen M. Ross School of Business
March 8, 2012
Journal of Accounting & Economics, Vol. 54, Issue 1, pp. 68-93, August 2012
Rock Center for Corporate Governance at Stanford University Working Paper No. 78
This study examines whether application of IFRS by non-US firms results in accounting amounts comparable to those resulting from application of US GAAP by US firms. IFRS firms have greater accounting system and value relevance comparability with US firms when IFRS firms apply IFRS than when they applied domestic standards. Comparability is greater for firms that adopt IFRS mandatorily, firms in common law and high enforcement countries, and in more recent years. Earnings smoothing, accrual quality, and timeliness are potential sources of the greater comparability. Although application of IFRS has enhanced financial reporting comparability with US firms, significant differences remain.
Number of Pages in PDF File: 75
Keywords: IAS, IASB, International Accounting Standards, International Accounting Standards Board, International Financial Reporting Standards, US GAAP, Comparability, Comparable Financial Reporting Standards
JEL Classification: G12, G15, M41, M44, M47
Date posted: April 7, 2010 ; Last revised: September 19, 2012
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