The Influence of Improvements in Accounting Standards on Earnings Management: The Case of IFRS

Journal ar
Australian Accounting Review
  • Volumen: 24
  • Número: 2
  • Fecha: 01 enero 2014
  • Páginas: 154-170
  • ISSN: 18352561 10356908
  • Tipo de fuente: Revista
  • DOI: 10.1111/auar.12020
  • Tipo de documento: Artículo
  • Editorial: Blackwell Publishing Ltd
This article examines the effect of improvements in the quality of International Financial Reporting Standards (IFRS) on the level of earnings management. In order to achieve this aim, we study the accounting quality of German listed companies through discretionary accruals yielded from 1998 to 2006. We assess the effectiveness of efforts by the International Accounting Standards Board to improve IFRS by using two indices that consider the revision process of the standards, and their mandatory application. Our results indicate that the improvement of accounting standards quality significantly reduces the level of reported negative discretionary accruals of the German listed firms during the period of analysis, once incentive variables are controlled. Further, companies gradually assume the quality of the new standards from the moment they can be voluntarily applied. © 2014 CPA Australia.

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