The impact of mandatory adoption of International Financial Reporting Standards on accounting quality, analysts' information environment and cost of capital in Latin America

Freitas de Moura, André Aroldo (2017). The impact of mandatory adoption of International Financial Reporting Standards on accounting quality, analysts' information environment and cost of capital in Latin America. University of Birmingham. Ph.D.

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Abstract

This thesis is structured upon three studies. The first study investigates whether mandatory IFRS adoption improves accounting quality in Latin America. The findings show that in the post-adoption period: accrual earnings management practices are reduced, value relevance of accounting increases, and the delay in recognising bad news reduces. However, these improvements cannot be found in firms with high bankruptcy possibility and poorly performing firms. The second study focuses on whether the analysts’ information environment has improved since the IFRS adoption. The results show that the mandatory adoption of IFRS improves analysts’ information environment, even after controlling for the firm-level reporting incentives. The third study focuses on whether IFRS has affected the cost of equity and debt in Latin America. The findings show that the cost of equity and debt decreased significantly in the post-IFRS period. Overall, the results found can be attributed to IFRS as the institutional environment has not changed significantly around the years of the mandatory adoption of IFRS. Thus, IFRS can contribute to enhance the accounting quality of Latin American firms, and may help to develop the capital market and the development of these firms.

Type of Work:

Thesis (Doctorates > Ph.D.)

Award Type:

Doctorates > Ph.D.

Supervisor(s):