Information Content of Earnings Announcements Around IFRS Adoption and a Simultaneous Change in Press Release Disclosure in Italy

Forthcoming at The International Journal of Accounting

39 Pages Posted: 1 Jun 2016 Last revised: 24 Apr 2019

See all articles by Pureum Kim

Pureum Kim

University of Southern California

Pier Luigi Marchini

University of Parma - Department of Economics

Gianfranco Siciliano

China Europe International Business School

Date Written: May 31, 2018

Abstract

This study investigates the effect of a security regulation that occurs concomitantly with International Financial Reporting Standards (IFRS) adoption on the information content of earnings announcements in Italy. To identify the effect of this regulation, we use a treatment (i.e., Italy) and a benchmark sample of IFRS countries that vary in the adoption of the security regulation, but are similar to Italy along a set of institutional dimensions. We find that the information content of earnings announcements increases after year 2005. This increase, however, is more pronounced in Italy. Corroborating the effects of the security regulation, we hand-collect and analyze non-earnings disclosures in 2,106 earnings announcement press releases. Our findings suggest that the inclusion of detailed IFRS financial statements in earnings announcements increased significantly only in Italy, and this explains the increased informativeness of IFRS earnings announcements. Our findings contribute to the recent literature suggesting that there are other complementary changes concurrent with IFRS that are necessary to confer capital market benefits.

Keywords: Information content, earnings announcement, IFRS, security regulation

JEL Classification: F30, G14, G18, K22, M40, M41, M48

Suggested Citation

Kim, Pureum and Marchini, Pier Luigi and Siciliano, Gianfranco, Information Content of Earnings Announcements Around IFRS Adoption and a Simultaneous Change in Press Release Disclosure in Italy (May 31, 2018). Forthcoming at The International Journal of Accounting. Available at SSRN: https://ssrn.com/abstract=2787234 or http://dx.doi.org/10.2139/ssrn.2787234

Pureum Kim

University of Southern California ( email )

2250 Alcazar Street
Los Angeles, CA 90089
United States

Pier Luigi Marchini

University of Parma - Department of Economics ( email )

Via Kennedy n.6
Parma, 43100
Italy
+39 0521 032389 (Phone)
+39 0521 032353 (Fax)

Gianfranco Siciliano (Contact Author)

China Europe International Business School ( email )

Shanghai-Hongfeng Road
Shanghai 201206
Shanghai 201206
China

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