Download This PaperAnalyzing Brokers’ Expertise: Did Analysts Fully Anticipate the Impact of IFRS Adoption on Earnings? The European Evidence
26 Pages Posted: 17 Jun 2009
Date Written: June 15, 2009
Abstract
Since 2005, all European Union listed firms must comply with IFRS. The resulting mandatory changes in accounting methods have substantially affected reported earnings predictions. Using the FactSet/JCF database that collects 2005 earnings forecasts under both IFRS and local GAAP for European listed companies, this research documents to what extent financial analysts were able to anticipate the impact of the new accounting rules on earnings determination. Results indicate that analysts were not able to efficiently anticipate the consequences of the IFRS adoption on earnings, forecast errors being significantly associated with differences in earnings resulting from the compliance with the new financial reporting standards.
JEL Classification: M44, M41, M47
Suggested Citation: Suggested Citation
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