Abstract

https://ssrn.com/abstract=873600
 
 

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Citations (43)



 


 



International GAAP Differences - The Impact on Foreign Analysts


Kee-Hong Bae


York University - Schulich School of Business

Hongping Tan


York University - Schulich School of Business

Michael Welker


Queen's University - Queen's School of Business

October 23, 2006

CAAA 2006 Annual Conference Paper

Abstract:     
This paper investigates the relation between differences in accounting standards across countries and foreign analyst following and forecast accuracy. We develop two measures of differences in generally accepted accounting principles (GAAP) for 1,176 country-pairs. We then examine the impact of these measures of accounting differences on foreign analysts. In so doing, we utilize a unique database that identifies the location of financial analysts around the world, creating a sample that covers 6,888 foreign analysts making a total of 43,968 forecasts for 6,169 firms from 49 countries during 1998 - 2004. We find that the extent to which GAAP differs between two countries is negatively related to both foreign analyst following and forecast accuracy. Our results suggest that GAAP differences are associated with economic costs for financial analysts.

Number of Pages in PDF File: 60

Keywords: GAAP differences, foreign analyst following, forecast accuracy

JEL Classification: M41, M44, M47, G29


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Date posted: January 5, 2006  

Suggested Citation

Bae, Kee-Hong and Tan, Hongping and Welker, Michael, International GAAP Differences - The Impact on Foreign Analysts (October 23, 2006). Available at SSRN: https://ssrn.com/abstract=873600 or http://dx.doi.org/10.2139/ssrn.873600

Contact Information

Kee-Hong Bae
York University - Schulich School of Business ( email )
4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
416-736-2100 ext) 20248 (Phone)
416-736-5687 (Fax)
Hongping Tan
York University - Schulich School of Business ( email )
4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
Michael Welker (Contact Author)
Queen's University - Queen's School of Business ( email )
Kingston
Ontario, Ontario K7L 3N6
Canada

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