Investor Perceptions of Potential IFRS Adoption in the United States

Posted: 22 Dec 2015

See all articles by Edith Leung

Edith Leung

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Philip Joos

Tilburg University; TIAS School for Business and Society

Date Written: October 01, 2012

Abstract

This paper examines the stock market reaction to 15 events relating to IFRS adoption in the United States. The goal is to assess whether investors perceive the switch to IFRS as beneficial or costly. Our findings suggest that investors' reaction to IFRS adoption is more positive in cases where IFRS is expected to lead to convergence benefits. Our results also indicate a less positive market reaction for firms with higher litigation risk, which is consistent with investors' concerns about greater discretion and less implementation guidance under IFRS for these firms. Overall, the findings are relevant to the current debate on IFRS adoption in the U.S. and highlight the importance of convergence to investors.

Suggested Citation

Leung, Edith and Joos, Philip, Investor Perceptions of Potential IFRS Adoption in the United States (October 01, 2012). Philip P. M. Joos and Edith Leung (2013) Investor Perceptions of Potential IFRS Adoption in the United States. Accounting Review, Vol. 88, No. 8, 2013, pp. 577-609., Available at SSRN: https://ssrn.com/abstract=2707022

Edith Leung (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Philip Joos

Tilburg University ( email )

School of Economics and Management
Warandelaan 2
Tilburg, 5000 LE
Netherlands
31 13 4668716 (Phone)
31 13 4668001 (Fax)

HOME PAGE: http://https://www.tilburguniversity.edu/staff/philjoos

TIAS School for Business and Society ( email )

Warandelaan 2
TIAS Building
Tilburg, Noord Brabant 5037 AB
Netherlands

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