The effect of mandatory IFRS adoption on real and accrual-based earnings management activities
This study examines the effect of mandatory adoption of International Financial Reporting Standards (IFRS) on both accrual-based and real earnings management. While prior literature has mainly examined the effects of IFRS adoption on accrual-based earnings management, no study to date has focused on...
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Veröffentlicht in: | Journal of accounting and public policy 2014-11, Vol.33 (6), p.551-572 |
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Format: | Artikel |
Sprache: | eng |
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Zusammenfassung: | This study examines the effect of mandatory adoption of International Financial Reporting Standards (IFRS) on both accrual-based and real earnings management. While prior literature has mainly examined the effects of IFRS adoption on accrual-based earnings management, no study to date has focused on the impact of IFRS adoption on real earnings management. Using a sample of 15,206 observations from 22 European countries between 2000 and 2010, this study employs a control sample of voluntary adopters and applies a differences-in-differences design to control for confounding concurrent events. The results suggest that mandatory IFRS adoption had no significant impact on either real or accrual-based earnings management practices. Additional analysis on a sub-sample of firms with relatively strong earnings management incentives supports a dominant role for firm-level reporting incentives over accounting standards in shaping financial reporting quality. |
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ISSN: | 0278-4254 1873-2070 |
DOI: | 10.1016/j.jaccpubpol.2014.08.006 |