Are the Market Effects around the Mandatory Adoption of IFRS Attributable to Quality Effects or Convergence Effects
讲座名称：
Are the Market Effects around the Mandatory Adoption of IFRS Attributable to Quality Effects or Convergence Effects
讲座时间：
2009-06-18
讲座人：
姚立杰
形式：
校区：
兴庆校区
实践学分：
讲座内容：
I examine whether positive market effects of mandatory International Financial Reporting Standards (IFRS) reporting (e.g., Daske, Hail, Leuz, and Verdi 2008) are attributed to the improved financial reporting quality with the IFRS mandates or the convergence of diverse accounting standards into a single set of accounting standards, IFRS. Specifically, I examine the market liquidity effects of mandatory IFRS reporting for firms in 23 countries (most European Union countries, Australia, Hong Kong, Philippines, Singapore, and South Africa) that are mandated to report under IFRS in or before the 2005 fiscal year. I then attempt to decompose the aggregate market liquidity effect into two parts: the Convergence Effect, which is due to the convergence of diverse domestic generally accepted accounting principles (GAAP) into a single set of accounting standards without regard to the content of the standard, and the Quality Effect, which is due to the change of standard’s quality around the introduction of IFRS.
Although I find that there is an increase in the aggregate market liquidity around the mandatory IFRS reporting, a finding consistent with Daske et al. (2008), the positive liquidity effect I observe is attributed only to the positive Convergence Effect. In addition, contrary to prior findings (e.g., Armstrong et al. 2007; Barth et al. 2006; Daske et al. 2008), the Quality Effect around the IFRS mandate is significantly negative in most cases, suggesting that IFRS are not of higher quality than other domestic GAAP. I also find that the better the enforcement, the greater the market liquidity effect for mandatory adopters but the less the market liquidity effect for voluntary adopters. The greater the difference between domestic GAAP and IFRS, the less the market liquidity effect of IFRS adoption for mandatory adopters. Moreover, a country’s willingness to adopt IFRS has a significant and negative effect on voluntary adopters, but has a significant and positive effect on first-time mandatory adopters.
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