The effect of IFRS adoption and investor protection on earnings quality around the world

Muhammad Nurul Houqe; Tony van Zijl; Keitha Dunstan; A. K M Waresul Karim

doi:10.1016/j.intacc.2012.07.003

The effect of IFRS adoption and investor protection on earnings quality around the world

Muhammad Nurul Houqe^*, Tony van Zijl, Keitha Dunstan, A. K M Waresul Karim

^*Corresponding author for this work

Bond Business School

Research output: Contribution to journal › Article › Research › peer-review

185 Citations (Scopus)

Abstract

This study examines the effects of mandatory IFRS adoption and investor protection on the quality of accounting earnings in forty-six countries around the globe. The results suggest that earnings quality increases for mandatory IFRS adoption when a country's investor protection regime provides stronger protection. This study extends the current literature that shows that accounting practices are influenced by country-level macro settings. The results highlight the importance of investor protection for financial reporting quality and the need for regulators to design mechanisms that limit managers' earnings management practices.

Original language	English
Pages (from-to)	333-355
Number of pages	23
Journal	International Journal of Accounting
Volume	47
Issue number	3
DOIs	https://doi.org/10.1016/j.intacc.2012.07.003
Publication status	Published - Sept 2012

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10.1016/j.intacc.2012.07.003

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abstract = "This study examines the effects of mandatory IFRS adoption and investor protection on the quality of accounting earnings in forty-six countries around the globe. The results suggest that earnings quality increases for mandatory IFRS adoption when a country's investor protection regime provides stronger protection. This study extends the current literature that shows that accounting practices are influenced by country-level macro settings. The results highlight the importance of investor protection for financial reporting quality and the need for regulators to design mechanisms that limit managers' earnings management practices.",

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The effect of IFRS adoption and investor protection on earnings quality around the world

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