Abstract

http://ssrn.com/abstract=891973
 
 

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Differences between Domestic Accounting Standards and IAS: Measurement, Determinants and Implications


Ole-Kristian Hope


University of Toronto - Rotman School of Management

Yuan Ding


China Europe International Business School (CEIBS)

Thomas Jeanjean


ESSEC Business School

Hervé Stolowy


HEC Paris - Accounting and Management Control Department


Journal of Accounting and Public Policy, Forthcoming
Rotman School of Management Working Paper No. 07-01

Abstract:     
This study analyzes determinants and effects of differences between Domestic Accounting Standards (DAS) and International Accounting Standards (IAS). We use an extensive list of differences between DAS and IAS to create two indices, absence and divergence. Absence measures the extent to which the rules regarding certain accounting issues are missing in DAS but are covered in IAS. Divergence applies in circumstances where the rules regarding the same accounting issue differ in DAS and IAS. It measures the extent of differences between DAS-based rules and IAS-based rules.

Using a sample of 30 countries for 2001, we show that absence is (mainly) determined by the importance of the equity market and ownership concentration, while divergence is positively associated with the level of economic development and the importance of the accounting profession, but is constrained by the importance of equity markets. Our analysis suggests that a higher level of absence implies more opportunities for earnings management and for decreases in firm-specific information to investors. A larger divergence from IAS is associated with richer firm-specific information in capital markets.

Keywords: International accounting differences, institutional factors, earnings management, synchronicity

JEL Classification: G10, M41, M43, M44, M47, G32

Accepted Paper Series





Not Available For Download

Date posted: March 26, 2006  

Suggested Citation

Hope, Ole-Kristian and Ding, Yuan and Jeanjean, Thomas and Stolowy, Hervé, Differences between Domestic Accounting Standards and IAS: Measurement, Determinants and Implications. Journal of Accounting and Public Policy, Forthcoming; Rotman School of Management Working Paper No. 07-01. Available at SSRN: http://ssrn.com/abstract=891973

Contact Information

Ole-Kristian Hope (Contact Author)
University of Toronto - Rotman School of Management ( email )
105 St. George Street
Toronto, Ontario M5S 3E6
Canada
HOME PAGE: http://www.rotman.utoronto.ca/FacultyAndResearch/Faculty/FacultyBios/Hope.aspx
Yuan Ding
China Europe International Business School (CEIBS) ( email )
699, Hongfeng Road
Shanghai 201206, Shanghai 201206
China
Thomas Jeanjean
ESSEC Business School ( email )
Avenue Bernard Hirsch
B.P 50105
BP 105 Cergy Cedex, 95021
France
Hervé Stolowy
HEC Paris (Groupe HEC) - Accounting and Management Control Department ( email )
Jouy-en-Josas Cedex
France
+33 1 39 67 94 42 (Phone)
+33 1 39 67 70 86 (Fax)
HOME PAGE: http://www.hec.fr/stolowy

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