Accounting Integration and Comparability: Evidence from Relative Performance Evaluation Around IFRS Adoption
Joanna Shuang Wu
University of Rochester - Simon Business School
University of Minnesota - Twin Cities
July 29, 2010
Simon School Working Paper No. FR 10-25
We study a sample of Continental European firms for changes in the sensitivity of their CEO turnover to their foreign peers’ accounting performance around the mandatory adoption of International Financial Reporting Standards (IFRS). We find a post-adoption increase in the use of Relative Performance Evaluation (RPE) based on foreign peers’ accounting information, consistent with greater financial reporting comparability associated with mandatory IFRS adoption. These findings cannot be explained by changes in foreign ownership or changes in foreign operations around mandatory IFRS adoption. Furthermore, we find stronger results for firms in more competitive industries and when peers are from highly correlated economies, consistent with the economic theory of RPE.
Number of Pages in PDF File: 47
JEL Classification: M41, M44, M47working papers series
Date posted: July 30, 2010
© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo3 in 0.391 seconds