Abstract
This study uses an ideal setting to capture the influence of the national institutional environment on outcomes (i.e., earnings quality) of IFRS convergence using a within-country approach. We show that earnings quality in terms of discretionary accruals and persistence has increased, while conservatism has decreased after IFRS convergence. The results are more pronounced in companies with a strong institutional environment. Our results are robust after considering incentives factors and other confounding factors. Our findings show differences in earnings quality in firms within a country adopting the same standards, let alone in firms worldwide. This indicates the context embeddedness of accounting standards.
| Original language | English |
|---|---|
| Pages (from-to) | 3367-3406 |
| Number of pages | 40 |
| Journal | Accounting and Finance |
| Volume | 60 |
| Issue number | 4 |
| Early online date | 10 Sept 2019 |
| DOIs | |
| Publication status | Published - Dec 2020 |
Bibliographical note
Copyright © 2019 The Authors. Accounting & Finance published by John Wiley & Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.Keywords
- Earnings quality
- IFRS convergence
- Institutional environment
- Within-country approach