Disclosure Incentives, Mandatory Standards and Firm Communication in the IFRS Adoption Setting

Posted: 22 Jun 2014

See all articles by Marvin Wee

Marvin Wee

Australian National University (ANU); Financial Research Network (FIRN)

Ann Tarca

University of Western Australia

Millicent Chang

The University of Western Australia; University of Wollongong

Multiple version iconThere are 2 versions of this paper

Date Written: May 12, 2014

Abstract

We investigate the content, timing and relevance of firms’ narrative disclosure about the effects of IFRS adoption in annual statutory financial statements and firm announcements to the stock exchange for 150 large listed Australian firms in the three-year period surrounding adoption (which occurred from 1 January 2005). We observe communication about changes in financial reports, even when the change relates to accounting rather than economic events. We record more disclosure by firms experiencing an adverse change in earnings, consistent with them being sensitive to signals about future earnings. When economic performance is stronger, firms provide less discussion of the accounting effects of IFRS. We also find the discussion of IFRS impact in both disclosure channels is value-relevant for firms with relatively higher levels of disclosure, providing evidence of the usefulness of transition disclosures.

Keywords: AASB 1047, AASB 101, continuous disclosure regime, International Financial Reporting Standards (IFRS), transition reconciliation, value-relevance

Suggested Citation

Wee, Marvin and Tarca, Ann and Chang, Millicent, Disclosure Incentives, Mandatory Standards and Firm Communication in the IFRS Adoption Setting (May 12, 2014). Australian Journal of Management, Vol. 39, No. 2, 2014. Available at SSRN: https://ssrn.com/abstract=2457080

Marvin Wee (Contact Author)

Australian National University (ANU) ( email )

The Australian National University
College of Business and Economics
Canberra, 2601
Australia
+61 2 61250416 (Phone)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Ann Tarca

University of Western Australia ( email )

Business School
35 Stirling Highway
Crawley WA 6009
Australia
+61 8 6488 3868 (Phone)
+61 8 6488 1047 (Fax)

Millicent Chang

The University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
AUSTRALIA

University of Wollongong ( email )

Northfields Avenue
Wollongong, New South Wales 2522
Australia

Register to save articles to
your library

Register

Paper statistics

Abstract Views
602
PlumX Metrics