IFRS adoption, financial reporting quality and cost of capital: a life cycle perspective

Ahsan Habib, Md Borhan Uddin Bhuiyan*, Mostafa Monzur Hasan

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)


Purpose: This paper aims to investigate the impact of International Financial Reporting Standards (IFRS) adoption on financial reporting quality and cost of equity. The paper further investigates whether such association varies at different life cycle stages.

Design/methodology/approach: This paper follows the methodologies of DeAngelo et al. (2006) and Dickinson (2011) to develop proxies for the firms’ stages in the life cycle.

Findings: Using both pre- and post-IFRS adoption period for Australian listed companies, the paper finds that financial reporting quality reduced and cost of equity increased because of the adoption of IFRS. The paper further evidences that financial reporting quality in the post-IFRS period increased cost of equity. Finally, the paper finds that mature firms produce a better quality of earnings, which result in lower cost of capital. The results indicate that a mature firm was benefited because of the adoption of IFRS.

Originality/value: The finding of this research is useful to the regulators and practitioners to understand the widespread benefit of IFRS adoption.

Original languageEnglish
Pages (from-to)497-522
Number of pages26
JournalPacific Accounting Review
Issue number3
Early online date2019
Publication statusPublished - 5 Aug 2019
Externally publishedYes


  • Cost of equity
  • Financial reporting quality
  • Firm life cycle
  • IFRS


Dive into the research topics of 'IFRS adoption, financial reporting quality and cost of capital: a life cycle perspective'. Together they form a unique fingerprint.

Cite this