Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/56682
Authors: 
Cascino, Stefano
Gassen, Joachim
Year of Publication: 
2012
Series/Report no.: 
SFB 649 discussion paper 2012-009
Abstract: 
The mandatory adoption of IFRS by many countries worldwide fuels the expectation that financial accounting information might become more comparable across countries. This expectation is opposed to an alternative view that stresses the importance of incentives in shaping accounting information. We provide early evidence on this debate by investigating the effects of mandatory IFRS adoption on the comparability of financial accounting information around the world. Using two comparability proxies based on De Franco et al. [2011], our results suggest that the overall comparability effect of mandatory IFRS adoption is marginal at best. To investigate the reasons for this finding, we first hand-collect data on IFRS compliance for a sample of German and Italian firms and find that firm-, region-, and country-level incentives systematically shape accounting compliance. We then use the identified compliance incentives to explain the variance in the comparability effect of mandatory IFRS adoption and find it to vary systematically with firm-level incentives, suggesting that only firms with high compliance incentives experience substantial increases in comparability.
Subjects: 
international accounting
IFRS
comparability
accounting harmonization
financial accounting compliance
reporting incentives
JEL: 
M41
G14
F42
Document Type: 
Working Paper

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