Mandatory adoption of IFRS in Latin America: a boon or a bias

Andre Aroldo Freitas De Moura, Jairaj Gupta

    Research output: Contribution to journalArticlepeer-review

    5 Citations (Scopus)
    118 Downloads (Pure)

    Abstract

    Exploiting the unique feature that Latin American countries have not undergone a significant change to the enforcement of accounting standards and investor protection mechanisms, we investigate whether mandatory adoption of IFRS and firm-level reporting incentives improve analysts’ information environment in Latin American countries (Argentina, Brazil, Chile, Mexico and Peru), and whether the precision of public, private and consensus information improve after IFRS adoption. Test results show that mandatory adoption of IFRS and firm-level reporting incentives improve analysts’ information environment. Overall, we confirm the positive effects of IFRS adoption, because the precision of public and consensus information is enhanced.
    Original languageEnglish
    Pages (from-to)111-133
    Number of pages23
    JournalJournal of International Financial Markets, Institutions and Money
    Volume60
    Early online date14 Jan 2019
    DOIs
    Publication statusPublished - May 2019

    Keywords

    • IFRS
    • analysts' information environment
    • forecast accuracy
    • target price forecast dispersion
    • investor protection mechanisms

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