The Impact Of Ifrs On The Relationship Between Conservatism And Investment Efficiency PDF Download
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| Author | : Paul André |
| Publisher | : |
| Total Pages | : 33 |
| Release | : 2015 |
| Genre | : |
| ISBN | : |
Download The Impact of IFRS on the Relationship Between Conservatism and Investment Efficiency Book in PDF, ePub and Kindle
We test to see whether a higher degree of conservatism is associated with greater investment efficiency (reducing over- and under-investment) for a sample of French firms before and after the mandatory adoption of IFRS in 2005. While a theoretical link between conservatism and investment efficiency is easily established, the question is whether this link still remains after the adoption of IFRS, which are generally considered to reduce conservatism. Empirical tests find a significant decrease in conservatism after IFRS adoption. This result is consistent with the results reported by Piot et al. (2011), Ahmed et al. (2013) and André et al. (2013). Our results show that in the pre-IFRS period, conservatism limited over- and under-investment. For the post-IFRS period, however, conservatism does not seem to play any role in improving investment efficiency. This paper contributes to the academic and regulatory debate over the economic consequences of the qualitative characteristics of useful financial information and the impact of IFRS adoption. The adoption of IFRS has certainly led to a new equilibrium between the various qualitative characteristics of financial information, but the costs and benefits of that equilibrium remain difficult to measure.
| Author | : Volker Laux |
| Publisher | : |
| Total Pages | : 51 |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
Download Effects of Accounting Conservatism on Investment Efficiency and Innovation Book in PDF, ePub and Kindle
We study how biases in financial reporting affect managers' incentives to develop innovative projects and to make appropriate investment decisions. Conservative reporting practices impose stricter verification standards for recognizing good news, and reduce the chance that risky innovations will lead to favorable future earnings reports. Holding all else constant, more conservative reporting therefore weakens the manager's incentive to work on innovative ideas, consistent with informal arguments in the extant literature. However, all else does not stay constant because the manager's pay plan will change in response to changes in the accounting system. We show that under optimal contracting, more conservative accounting does not stifle innovation in organizations, but rather increases incentives for innovation, as long as conservatism reduces the risk of an overstatement.
| Author | : Ru Gao |
| Publisher | : |
| Total Pages | : |
| Release | : 2017 |
| Genre | : |
| ISBN | : |
Download The Impact of Mandatory IFRS Adoption on Investment Efficiency Book in PDF, ePub and Kindle
This paper investigates whether mandatory adoption of International Financial Reporting Standards (IFRS) is followed by a decline in firms' sub-optimal investments. On average, we find that the probability of under-investment in capital expenditure declines for firms from 23 countries requiring mandatory adoption of IFRS relative to firms from countries that do not have such requirements; meanwhile the probability of over-investment remains unchanged. However, this real effect becomes smaller when we control for the concurrent changes to the enforcement of financial reporting along with the introduction of IFRS in some countries, suggesting that the switch in standards is only one of the drivers for the observed benefits. Moreover, we find that the reduction in sub-optimal investments is driven by firms with high reporting incentives to provide transparent financial reports from countries where the existing legal and enforcement systems are strong. We further show that the real effect increases with the predicted changes in accounting comparability. Further, we find that after mandatory IFRS adoption, capital investment becomes more value-relevant, less sensitive to the availability of free cash flows and more responsive to growth opportunities. Our findings provide new insights into the real effects of mandatory IFRS adoption.
| Author | : Juan M. García Lara |
| Publisher | : |
| Total Pages | : 47 |
| Release | : 2015 |
| Genre | : |
| ISBN | : |
Download Accounting Conservatism and Firm Investment Efficiency Book in PDF, ePub and Kindle
We argue that conservatism improves investment efficiency. In particular, we predict that it resolves debt-equity conflicts, facilitating a firm's access to debt financing and limiting underinvestment. This permits the financing of prudent investments that otherwise might not be pursued. Our empirical results confirm these predictions. We find that more conservative firms invest more and issue more debt in settings prone to underinvestment and that these effects are more pronounced in firms characterized by greater information asymmetries. We also find that conservatism is associated with reduced overinvestment, even for opaque investments such as research and development.
| Author | : Patricia M. Dechow |
| Publisher | : Research Foundation of the Institute of Chartered Financial Analysts |
| Total Pages | : 152 |
| Release | : 2004-01-01 |
| Genre | : Corporate profits |
| ISBN | : 9780943205687 |
Download Earnings Quality Book in PDF, ePub and Kindle
| Author | : Gary C. Biddle |
| Publisher | : |
| Total Pages | : 49 |
| Release | : 2017 |
| Genre | : |
| ISBN | : |
Download Do Adoptions of International Financial Reporting Standards Enhance Capital Investment Efficiency? Book in PDF, ePub and Kindle
We examine whether adoptions of International Financial Reporting Standards (IFRS) enhance capital investment efficiency as measured by investment-cash flow sensitivity and value-enhancing risk taking for a comprehensive sample comprised of 10,340 mandatory and voluntary IFRS adoptions across 26 countries during the pre-financial crisis period of 2001-08. Our results reveal a positive association between mandatory IFRS adoptions and capital investment efficiency. In contrast to prior findings for capital market effects, this association is stronger in countries with weaker legal protections, more concentrated ownership, and prior reporting standards that differ more from IFRS. These findings lend support to mandatory but not voluntary IFRS adoptions serving to enhance firm-level capital investment efficiency, particularly in countries with weaker investor protections that mitigate capital market effects, with implications for standards setters, regulators and research design.
| Author | : Charles J. P. Chen |
| Publisher | : |
| Total Pages | : 37 |
| Release | : 2009 |
| Genre | : |
| ISBN | : |
Download Relationship-Specific Investment and Accounting Conservatism Book in PDF, ePub and Kindle
We propose that relationship-specific investment induces accounting conservatism and find that at both industry and firm levels a firm's accounting conservatism is positively associated with relationship-specific investment of its customers/suppliers. Further, this association is weaker when vertical integration or extended relationship exists between the firm and its customers/suppliers. These results are qualitatively invariant to alteration of proxies for relationship-specific investment, conservatism or control for endogeneity.
| Author | : James Harris Bliss |
| Publisher | : |
| Total Pages | : 880 |
| Release | : 1924 |
| Genre | : Accounting |
| ISBN | : |
Download Management Through Accounts Book in PDF, ePub and Kindle
| Author | : Alessandro Ghio |
| Publisher | : Springer Nature |
| Total Pages | : 183 |
| Release | : 2020-04-02 |
| Genre | : Business & Economics |
| ISBN | : 3030422992 |
Download The Evolution of Corporate Disclosure Book in PDF, ePub and Kindle
This book provides a critical analysis of the evolution of corporate disclosure. Building upon prior academic literature, it assesses the most important changes in mandatory corporate disclosure, the growing relevance of social and environmental disclosure, and revolutionary new forms of corporate communication, in particular social media. It also includes empirical analyses that shed further light on the impact of voluntary communication, i.e. social and environmental reporting and corporate social media communication, on managerial and investment decisions. Lastly, it discusses new directions for accounting and corporate governance research on the theoretical and empirical challenges of corporate disclosure. Offering a wealth of relevant and timely advice, the book will help regulators design policies that allow businesses to overcome current and emerging economic, social, and technological challenges.
| Author | : Silvia Ferramosca |
| Publisher | : Springer |
| Total Pages | : 276 |
| Release | : 2018-03-13 |
| Genre | : Business & Economics |
| ISBN | : 3319735888 |
Download Accounting Choices in Family Firms Book in PDF, ePub and Kindle
This book provides a critical analysis of the current state of knowledge on the relationship between family firms and a wide range of accounting choices, including earnings management, accounting conservatism, and financial and non-financial disclosure. In examining the choices made in family firms, the authors explore and elucidate the relevance of agency, socioemotional wealth, stewardship, and resource-based theories. Readers will also find close consideration of the impacts of a country’s culture and societal values on accounting choices. In particular, further evidence is provided on the impact of different cultures on accounting conservatism in family businesses. Finally, avenues for future accounting research on family firms are discussed, highlighting theoretical and empirical challenges. In addition to offering a revealing analysis of the influence of ownership types and cultures on accounting choices within family firms, the book identifies significant practical implications for the management of family firms and policy implications for regulators and standard setters.
