Abstract
We investigate whether the adoption of IFRS increases the value relevance of accounting information for firms listed on the Australian Securities Exchange. Using a longitudinal study that covers pre-IFRS and post-IFRS periods during 1990-2008, we find that earnings become more value-relevant whereas the book value of equity does not. This impact is concentrated in the subsamples of industrial firms, both large and small, and firms reporting an AGAAP-IFRS accounting reconciliation upon IFRS adoption. Consistent with an increase in the value relevance of earnings, earnings also become more persistent around IFRS adoption. Our study suggests that even for a country categorized by strong investor protection and high-quality financial reporting and enforcement, IFRS adoption affects the associations between accounting information and market value.
Original language | English |
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Pages (from-to) | 151-173 |
Number of pages | 23 |
Journal | Australian Journal of Management |
Volume | 36 |
Issue number | 2 |
DOIs | |
Publication status | Published - 1 Aug 2011 |
Externally published | Yes |
Keywords
- Accounting information
- IFRS
- value relevance