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

Andre Aroldo Freitas De Moura; Jairaj Gupta

doi:10.1016/j.intfin.2018.12.016

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

Andre Aroldo Freitas De Moura, Jairaj Gupta

Finance

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5 Citations (Scopus)

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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 language	English
Pages (from-to)	111-133
Number of pages	23
Journal	Journal of International Financial Markets, Institutions and Money
Volume	60
Early online date	14 Jan 2019
DOIs	https://doi.org/10.1016/j.intfin.2018.12.016
Publication status	Published - May 2019

Keywords

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

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10.1016/j.intfin.2018.12.016Licence: None: All rights reserved

Freitas_De_Moura_&_Gupta_Mandatory_adoption_Journal_of_International_Financial_Markets_2019Accepted author manuscript, 1.53 MBLicence: Creative Commons: Attribution-NonCommercial-NoDerivs (CC BY-NC-ND)

https://www.sciencedirect.com/science/article/pii/S1042443118303184Licence: None: All rights reserved

Cite this

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title = "Mandatory adoption of IFRS in Latin America: a boon or a bias",

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{\textquoteright} 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{\textquoteright} information environment. Overall, we confirm the positive effects of IFRS adoption, because the precision of public and consensus information is enhanced.",

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doi = "10.1016/j.intfin.2018.12.016",

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T2 - a boon or a bias

AU - Freitas De Moura, Andre Aroldo

AU - Gupta, Jairaj

PY - 2019/5

Y1 - 2019/5

N2 - 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.

AB - 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.

KW - IFRS

KW - analysts' information environment

KW - forecast accuracy

KW - target price forecast dispersion

KW - investor protection mechanisms

UR - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3313165

U2 - 10.1016/j.intfin.2018.12.016

DO - 10.1016/j.intfin.2018.12.016

M3 - Article

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VL - 60

SP - 111

EP - 133

JO - Journal of International Financial Markets, Institutions and Money

JF - Journal of International Financial Markets, Institutions and Money

ER -

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

Abstract

Keywords

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