Abstract

http://ssrn.com/abstract=275348
 
 

References (62)



 
 

Citations (108)



 


 



IAS versus US GAAP: Information Asymmetry-Based Evidence from Germany's New Market


Christian Leuz


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Center for Financial Studies (CFS); University of Pennsylvania - Wharton Financial Institutions Center; CESifo Research Network

December 2002


Abstract:     
The competition between IAS and US GAAP to become the global accounting standard has created a debate about the relative quality of the two standards. This paper compares IAS and US GAAP in terms of information asymmetry and market liquidity - two key constructs in securities regulation. It uses firms trading in Germany's New Market, which must choose between IAS and US GAAP in preparing their financial statements, but face the same regulatory environment. That is, institutional factors, such as listing requirements, market microstructure and standards enforcement, are held constant in the comparison. The findings do not indicate that US GAAP is of higher quality as frequently claimed. Differences in the bid-ask spread and trading volume between IAS and US GAAP firms are economically and statistically insignificant. Subsequent analyses of the dispersion of analysts' forecasts, IPO underpricing and firms' standard choices corroborate these findings. Thus, at least for New Market firms, IAS and US GAAP appear to be comparable in their ability to reduce information asymmetries.

Key Words: International Accounting, Disclosure, Information Asymmetry, Market Liquidity

Note: Previously Titled: IAS versus US GAAP: A (New) Market Based Comparison

Number of Pages in PDF File: 43

JEL Classification: D82, M41, G30

working papers series





Download This Paper

Date posted: June 28, 2001  

Suggested Citation

Leuz, Christian, IAS versus US GAAP: Information Asymmetry-Based Evidence from Germany's New Market (December 2002). Available at SSRN: http://ssrn.com/abstract=275348 or http://dx.doi.org/10.2139/ssrn.275348

Contact Information

Christian Leuz (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-834-1996 (Phone)
HOME PAGE: http://chicagobooth.edu/fac/christian.leuz
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
HOME PAGE: http://www.nber.org
European Corporate Governance Institute (ECGI)
Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Center for Financial Studies (CFS) ( email )
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
University of Pennsylvania - Wharton Financial Institutions Center
3641 Locust Walk
Philadelphia, PA 19104-6218
United States
CESifo Research Network
Poschinger Str. 5
Munich, DE-81679
Germany
Feedback to SSRN


Paper statistics
Abstract Views: 11,909
Downloads: 3,217
Download Rank: 1,524
References:  62
Citations:  108

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.297 seconds