Document Type
Journal article
Source Publication
The Accounting Review
Publication Date
9-1-2012
Volume
87
Issue
5
First Page
1767
Last Page
1789
Publisher
American Accounting Association
Keywords
IFRS adoption, information comparability, institutional environment
Abstract
This study examines whether the mandatory adoption of International Financial Reporting Standards (IFRS) in the European Union significantly improves information comparability in 17 European countries. We employ three proxies—the similarity of accounting functions that translate economic events into accounting data, the degree of information transfer, and the similarity of the information content of earnings and of the book value of equity—to measure information comparability. Our results suggest that mandatory IFRS adoption improves cross-country information comparability by making similar things look more alike without making different things look less different. Our results also suggest that both accounting convergence and higher quality information under IFRS are the likely drivers of the comparability improvement. In addition, we find some evidence that cross-country comparability improvement is affected by firms’ institutional environment.
DOI
10.2308/accr-50192
Print ISSN
00014826
E-ISSN
15587967
Publisher Statement
Copyright © 2012 American Accounting Association
Access to external full text or publisher's version may require subscription.
Full-text Version
Accepted Author Manuscript
Language
English
Recommended Citation
Yip, R. W. Y., & Young, D. (2012). Does mandatory IFRS adoption improve information comparability? The Accounting Review, 87(5), 1767-1789. doi: 10.2308/accr-50192
