Disentangling Mandatory IFRS Reporting and Changes in Enforcement

Journal of Accounting and Economics, Vol. 56, Pages 178-188, 2013

29 Pages Posted: 9 Nov 2013 Last revised: 3 Apr 2016

See all articles by Mary E. Barth

Mary E. Barth

Stanford University - Graduate School of Business

Doron Israeli

IDC Herzliya - Arison School of Business; Nazarbayev University - Graduate School of Business

Date Written: November 27, 2013

Abstract

We discuss “Mandatory IFRS Reporting and Changes in Enforcement” by Christensen, Hail, and Leuz (CHL, 2013). We begin by discussing CHL in the context of prior literature, and subsequently discuss the research design, results, and inferences. CHL seeks to contribute to the literature by disentangling the liquidity benefits of changes in accounting standards from those of changes in enforcement. Taken at face value, we believe that the evidence in CHL suggests that both change in enforcement and adoption of International Financial Reporting Standards (IFRS) confer liquidity benefits. The largest benefits obtain when the change to IFRS reporting is combined with change in enforcement. This is not to say that enforcement conveys capital market benefits but IFRS reporting does not, or that IFRS reporting conveys capital market benefits but enforcement does not; both are necessary to confer capital market benefits.

Keywords: International accounting, International Financial Reporting Standards (IFRS), Regulation, Enforcement, Liquidity, Identification, Methodology

JEL Classification: C13, C51, G15, K22, M41

Suggested Citation

Barth, Mary E. and Israeli, Doron, Disentangling Mandatory IFRS Reporting and Changes in Enforcement (November 27, 2013). Journal of Accounting and Economics, Vol. 56, Pages 178-188, 2013, Available at SSRN: https://ssrn.com/abstract=2351466 or http://dx.doi.org/10.2139/ssrn.2351466

Mary E. Barth (Contact Author)

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-723-9040 (Phone)
650-725-0468 (Fax)

Doron Israeli

IDC Herzliya - Arison School of Business ( email )

P.O. Box 167
Herzliya, 46150
Israel
+972 9 952 7673 (Phone)

Nazarbayev University - Graduate School of Business ( email )

53 Kabanbay Batyra Avenue
Astana, 010000
Kazakhstan

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