City Research Online

Abstract

Many researchers have tried to compare the value relevance of accounting information under national GAAP with that of the newly implemented MRS in EU countries. However, due to the unavailability of data they limited their studies to either analysing reconciliations from national GAAP to IFRS or examining firms that voluntarily adopted MRS before the 1st January 2005.

The novelty of this research is that it compares annual accounts of firms for the pre and post IFRS period and examines the change in the value relevance of accounting information. The theoretical framework of the regression model comes from Ohlson (1995). The data consists of 50 firms in each observed country (i.e. the UK, the Netherlands, Gennany, and France) that are tested for a 4 year period (2003-2006).

The results of this study are intriguing. There is an observed overall increase in the value relevance of accounting infonnation. However, the magnitude of the change is not the same for all countries. Countries like France, which were initially sceptical to the idea of applying international standards, indicated higher levels of value relevance of accounting information than the UK and the Netherlands. Germany was the country with the highest number of early IAS adopters. Although such firms were excluded from the sample, Germany emphatically remained one of the countries with the highest level of value relevance of accounting information. On the other hand, the UK and the Netherlands were the countries with the highest positive change in value relevance between the pre and post IFRS periods. Future research will tell whether the observed overall increase, during the transition-to-IFRS period, in the value relevance of accounting information will become a long-term trend for these countries.

Publication Type:	Thesis (Doctoral)
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Departments:	Bayes Business School > Management Doctoral Theses Bayes Business School > Bayes Business School Doctoral Theses

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