Discussion of 'Economic Consequences of IFRS Adoption: The Role of Changes in Disclosure Quality'

15 Pages Posted: 16 Dec 2020

See all articles by Patricia L. Naranjo

Patricia L. Naranjo

Rice University

Rodrigo S. Verdi

Massachusetts Institute of Technology (MIT)

Date Written: August 31, 2020


Li, Siciliano, and, Venkatachalam (hereafter LSV) propose a two-stage approach to studying the effects of the adoption of the International Financial Reporting Standards (IFRS) on economic outcomes. The key innovation of their paper is that it links the economic outcomes effect to a particular channel: disclosure quality. LSV first investigate the effect of IFRS adoption on disclosure quality, then link the change in disclosure quality to two economic outcomes: market liquidity and audit fees. To proxy for disclosure quality, the authors use the measure of line-item disclosure disaggregation in the balance sheet and income statement proposed by Chen et al. (2015).

Our discussion proceeds in two steps: First, we discuss the existing literature on this topic and position LSV within it. The goal is to highlight conceptual issues and suggest opportunities for future research. Second, we discuss empirical issues related to the research design and the results. We comment on both stages of LSV’s two-stage approach and suggest possible avenues for future research on this topic.

Keywords: IFRS, IAS, Financial Reporting Regulation, International Accounting, Disclosure Quality

JEL Classification: M41

Suggested Citation

Naranjo, Patricia L. and Verdi, Rodrigo S., Discussion of 'Economic Consequences of IFRS Adoption: The Role of Changes in Disclosure Quality' (August 31, 2020). Contemporary Accounting Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3683948 or http://dx.doi.org/10.2139/ssrn.3683948

Patricia L. Naranjo

Rice University ( email )

6100 South Main Street
McNair Hall - Room 343
Houston, TX 77005-1892
United States
7133485386 (Phone)

Rodrigo S. Verdi (Contact Author)

Massachusetts Institute of Technology (MIT) ( email )

Sloan School of Management
100 Main Street E62-666
Cambridge, MA 02142
United States
(617) 253 2956 (Phone)

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
PlumX Metrics