Year: 2012
Type: article
Abstract: ABSTRACT This study examines whether the mandatory adoption of International Financial Reporting Standards (IFRS) in the European Union significantly improves information comparability in 17 European countries. We employ three proxies—the similarity of accounting functions that translate economic events into accounting data, the degree of information transfer, and the similarity of the information content of earnings and of the book value of equity—to measure information comparability. Our results suggest that mandatory IFRS adoption improves cross-country information comparability by making similar things look more alike without making different things look less different. Our results also suggest that both accounting convergence and higher quality information under IFRS are the likely drivers of the comparability improvement. In addition, we find some evidence that cross-country comparability improvement is affected by firms' institutional environment. Data Availability: Data are available from commercial providers (Worldscope, DataStream, and I/B/E/S).
Source: The Accounting Review
DOI: 10.2308/accr-50192
Authors: Rita W. Y. Yip, Danqing Young
Institutions: Lingnan University, Chinese University of Hong Kong
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2147232220