International financial reporting standards and financial information quality: Principles versus rules-based standards

Seyed Sajad Ebrahimi Rad, Zaini Embong

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

The objective of the present study is to examine whether the adoption of International Financial Reporting Standards (IFRS) increases financial information quality. The IFRS brings about substantial changes in accounting standards. One of the prominent features of the system is that it results in the production of financial information of higher quality. Most extant studies in this area are performed at firm-level. The present study, on the other hand, examines the impact of IFRS adoption at the country-level. Environmental determinism theory states that accounting is a function of environmental variables, such as ownership structure, information environment and capital market condition. Therefore, the impact of IFRS adoption could be different across different countries. The present study addresses the existing lack of research that compares the outcomes of IFRS adoption between countries. Besides comparing the quality of financial information before and after the adoption of IFRS, the present study also compares the effects of IFRS adoption between countries with different accounting bases prior to the adoption. The results show that financial information quality, measured by five indicators, improves after IFRS adoption; and that the impact is more prevalent in a rules-based country compared to a principles-based country.

Original languageEnglish
JournalJurnal Pengurusan
Volume39
Publication statusPublished - 2013

Fingerprint

International Financial Reporting Standards
Information quality
Rule-based
Financial information
Ownership structure
Determinism
Accounting standards
Market conditions
Capital markets
State theory
Information environment

Keywords

  • IFRS
  • Information quality
  • Malaysia
  • The philippines

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)
  • Accounting
  • Business and International Management

Cite this

International financial reporting standards and financial information quality : Principles versus rules-based standards. / Rad, Seyed Sajad Ebrahimi; Embong, Zaini.

In: Jurnal Pengurusan, Vol. 39, 2013.

Research output: Contribution to journalArticle

@article{0ebebe85313e41e7961b089970285a4d,
title = "International financial reporting standards and financial information quality: Principles versus rules-based standards",
abstract = "The objective of the present study is to examine whether the adoption of International Financial Reporting Standards (IFRS) increases financial information quality. The IFRS brings about substantial changes in accounting standards. One of the prominent features of the system is that it results in the production of financial information of higher quality. Most extant studies in this area are performed at firm-level. The present study, on the other hand, examines the impact of IFRS adoption at the country-level. Environmental determinism theory states that accounting is a function of environmental variables, such as ownership structure, information environment and capital market condition. Therefore, the impact of IFRS adoption could be different across different countries. The present study addresses the existing lack of research that compares the outcomes of IFRS adoption between countries. Besides comparing the quality of financial information before and after the adoption of IFRS, the present study also compares the effects of IFRS adoption between countries with different accounting bases prior to the adoption. The results show that financial information quality, measured by five indicators, improves after IFRS adoption; and that the impact is more prevalent in a rules-based country compared to a principles-based country.",
keywords = "IFRS, Information quality, Malaysia, The philippines",
author = "Rad, {Seyed Sajad Ebrahimi} and Zaini Embong",
year = "2013",
language = "English",
volume = "39",
journal = "Jurnal Pengurusan",
issn = "0127-2713",
publisher = "Penerbit Universiti Kebangsaan Malaysia",

}

TY - JOUR

T1 - International financial reporting standards and financial information quality

T2 - Principles versus rules-based standards

AU - Rad, Seyed Sajad Ebrahimi

AU - Embong, Zaini

PY - 2013

Y1 - 2013

N2 - The objective of the present study is to examine whether the adoption of International Financial Reporting Standards (IFRS) increases financial information quality. The IFRS brings about substantial changes in accounting standards. One of the prominent features of the system is that it results in the production of financial information of higher quality. Most extant studies in this area are performed at firm-level. The present study, on the other hand, examines the impact of IFRS adoption at the country-level. Environmental determinism theory states that accounting is a function of environmental variables, such as ownership structure, information environment and capital market condition. Therefore, the impact of IFRS adoption could be different across different countries. The present study addresses the existing lack of research that compares the outcomes of IFRS adoption between countries. Besides comparing the quality of financial information before and after the adoption of IFRS, the present study also compares the effects of IFRS adoption between countries with different accounting bases prior to the adoption. The results show that financial information quality, measured by five indicators, improves after IFRS adoption; and that the impact is more prevalent in a rules-based country compared to a principles-based country.

AB - The objective of the present study is to examine whether the adoption of International Financial Reporting Standards (IFRS) increases financial information quality. The IFRS brings about substantial changes in accounting standards. One of the prominent features of the system is that it results in the production of financial information of higher quality. Most extant studies in this area are performed at firm-level. The present study, on the other hand, examines the impact of IFRS adoption at the country-level. Environmental determinism theory states that accounting is a function of environmental variables, such as ownership structure, information environment and capital market condition. Therefore, the impact of IFRS adoption could be different across different countries. The present study addresses the existing lack of research that compares the outcomes of IFRS adoption between countries. Besides comparing the quality of financial information before and after the adoption of IFRS, the present study also compares the effects of IFRS adoption between countries with different accounting bases prior to the adoption. The results show that financial information quality, measured by five indicators, improves after IFRS adoption; and that the impact is more prevalent in a rules-based country compared to a principles-based country.

KW - IFRS

KW - Information quality

KW - Malaysia

KW - The philippines

UR - http://www.scopus.com/inward/record.url?scp=84893964530&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84893964530&partnerID=8YFLogxK

M3 - Article

AN - SCOPUS:84893964530

VL - 39

JO - Jurnal Pengurusan

JF - Jurnal Pengurusan

SN - 0127-2713

ER -