Keywords

IFRS, earnings announcements, information content

Abstract

This study examines whether the information content of earnings announcements – abnormal return volatility and abnormal trading volume – increases in countries following mandatory IFRS adoption, and conditions and mechanisms through which increases occur. Findings suggest information content increased in 16 countries that mandated adoption of IFRS relative to 11 that maintained domestic accounting standards, although the effect of mandatory IFRS adoption depends on the strength of legal enforcement in the adopting country. Utilizing a path analysis methodology, we find evidence of three mechanisms through which IFRS adoption increases information content: reducing reporting lag, increasing analyst following, and increasing foreign investment.

Original Publication Citation

“The Information Content of Annual Earnings Announcements and Mandatory Adoption of IFRS” Journal of Accounting and Economics (2012) 53:34–54 (with Edward Maydew and Wayne Landsman).

Document Type

Peer-Reviewed Article

Publication Date

2012

Publisher

Journal of Accounting and Economics

Language

English

College

Marriott School of Business

Department

Accountancy

University Standing at Time of Publication

Full Professor

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Accounting Commons

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