Abstract: The purpose of this study is to investigate whether firms applying International Financial Reporting Standards (IFRS), provide high-quality and comparable earnings information that is useful for decision making of information users relative to firms applying local Generally Accepted Accounting Principles (GAAP). Focus is placed on the earnings quality of listed firms in several developed countries: Australia, Canada, France, Germany, Japan, the United Kingdom (UK), and the United States (US). Except for Japan and the US, the adoption of IFRS is mandatory for listed firms in these countries. In Japan, the application of IFRS is allowed for specific listed firms. In the US, the foreign firms listed on the US securities market are permitted to apply IFRS but the listed domestic firms are prohibited from doing so. In this paper, the differences in earnings quality are compared between firms applying local GAAP and those applying IFRS in each country and industry category, and the reasons of differences in earnings quality are analyzed using various factors. The results show that, although the earnings quality of firms applying IFRS is higher than that of firms applying local GAAP, this varies with country and industry category. Thus, even if a single set of global accounting standards is used for all listed firms worldwide, it is difficult to establish comparability of financial information among global firms. These findings imply that various circumstances surrounding firms, industries, and countries etc. influence business operations and affect the differences in earnings quality.
Abstract: The last two decades witnessed a movement towards
harmonization of international financial reporting standards (IFRS)
throughout the global economy. This investigation seeks to identify
the factors that could explain the adoption of IFRS by poor
jurisdictions. While there has been a considerable amount of
literature published on the effects and key drivers of IFRS adoption
in both developed and developing countries, little attention has been
paid to jurisdictions with less developed capital markets and low
income levels exclusively. Drawing upon the Institutional Isomorphism theory and analyzing
a sample of 45 poor jurisdictions between 2008 and 2013, the study
empirically shows that poor jurisdictions are driven by legitimacy
concerns rather than by economic reasoning to adopt an international
accounting perspective. This in turn has implications for the IASB, as
it should seek to influence institutional pressures within a particular
jurisdiction in order to promote IFRS adoption.
Abstract: Increase in globalization of capital markets brings the
higher requirements on financial information provided for investors
who look for a highly comparable information. Paper deals with the
advantages and limitations of applying International Financial
Reporting Standards (IFRS) in the Czech Republic and Ukraine. As a
greatest limit for full adoption of IFRS shall be acknowledged the
strong connection of continental accounting to tax system and
enormous high administrative burden for IFRS appliers.