Financial Statement Impact of IFRS Adoption: The Case of Korea and Implication for IFRS Adoption in the U.S.

2013 ◽  
Author(s):  
Yoon Ho Kim ◽  
Jaywon Lee ◽  
Sang Hyun Park
Keyword(s):  
Financial Statement ◽  
Ifrs Adoption ◽  
The U.S

Financial Restatements and Shareholder Ratifications of the Auditor

2009 ◽  
Vol 28 (1) ◽  
pp. 225-240 ◽  
Author(s):  
Li-Lin Liu ◽  
K. Raghunandan ◽  
Dasaratha Rama
Keyword(s):  
Audit Quality ◽  
Empirical Support ◽  
Securities And Exchange Commission ◽  
Financial Statement ◽  
Shareholder Voting ◽  
Financial Restatements ◽  
Preceding Period ◽  
Significant Attention ◽  
The U.S ◽  
Selection Of

SUMMARY: Regulators and legislators have focused significant attention on financial statement restatements in recent years, and the U.S. Securities and Exchange Commission (SEC) and financial statement users view restatements as audit failures. The SEC (2000, 2003a) suggests that shareholder voting on auditor ratification will be impacted by perceptions of audit quality. In this paper we examine shareholder voting on auditor ratifications in 2005 or 2006 following restatement announcements by SEC registrants. We find that shareholders are more likely to vote against auditor ratification after a restatement when compared with votes at (1) firms without restatements or (2) restating firms in the preceding period. Overall, the results provide empirical support to the SEC's assertion that shareholder voting on auditor ratification will be related to perceptions of audit quality, and also support recent actions by shareholder activists to require all firms to submit the selection of the auditor for a ratification vote by shareholders.

SEC XBRL Filing Requirements: An Instructional Case on Tagging Financial Statement Disclosures

2010 ◽  
Vol 25 (3) ◽  
pp. 489-511 ◽  
Author(s):  
Ernest Capozzoli ◽  
Stephanie Farewell
Keyword(s):  
Oil And Gas ◽  
Financial Statements ◽  
Securities And Exchange Commission ◽  
Financial Statement ◽  
Publicly Traded ◽  
Item Level ◽  
Interactive Data ◽  
The U.S

ABSTRACT: On January 20, 2009, the U.S. Securities and Exchange Commission (SEC) released Rule 33-9002 for the phase-in of interactive data (SEC 2009a). An important component of this rule is the phase-in of detailed tagging of financial statement note disclosures. Tagging is the process of associating a taxonomy element with a financial statement concept for a particular context. While some of the filers have participated in the SEC Voluntary Filing Project and prepared instance documents tagged at the line item level most have not prepared detail-tagged notes to accompany the financial statements (SEC 2005; Choi et al. 2008). This case discusses the structure of disclosures, as they exist in the 2009 U.S. GAAP Taxonomy, followed by a discussion of dimensional extensions and concludes with an example of block and detailed disclosure tagging using Rivet Software’s Dragon Tag (Rivet 2009). The example uses the capitalized costs disclosure for Anadarko Petroleum, a publicly traded company. Following the example, the case requires students to block and detail tag the capitalized costs disclosure for Dig Deep, a hypothetical oil and gas company. By completing the case, students develop an understanding of the current U.S. GAAP taxonomy, skills relating to mapping and tagging processes, and make use of a commonly used XBRL taxonomy and instance document creation program.

Global Accounting Convergence and the Potential Adoption of IFRS by the U.S. (Part I): Conceptual Underpinnings and Economic Analysis

2010 ◽  
Vol 24 (3) ◽  
pp. 355-394 ◽  
Author(s):  
Luzi Hail ◽  
Christian Leuz ◽  
Peter Wysocki
Keyword(s):  
United States ◽  
Cost Savings ◽  
Cost Benefit ◽  
The United States ◽  
Future Evolution ◽  
Reporting Practices ◽  
Market Effects ◽  
Ifrs Adoption ◽  
Transition Costs ◽  
The U.S

SYNOPSIS: This article is Part I of a two-part series analyzing the economic and policy factors related to the potential adoption of IFRS by the United States. In this part, we develop the conceptual framework for our analysis of potential costs and benefits from IFRS adoption in the United States. Drawing on the academic literature in accounting, finance, and economics, we assess the potential impact of IFRS adoption on the quality and comparability of U.S. reporting practices, the ensuing capital market effects, and the potential costs of switching from U.S. GAAP to IFRS. We also discuss the compatibility of IFRS with the current U.S. regulatory and legal environment, as well as the possible macroeconomic effects of IFRS adoption. Our analysis shows that the decision to adopt IFRS mainly involves a cost-benefit trade-off between (1) recurring, albeit modest, comparability benefits for investors; (2) recurring future cost savings that will largely accrue to multinational companies; and (3) one-time transition costs borne by all firms and the U.S. economy as a whole, including those from adjustments to U.S. institutions. In Part II of the series (see Hail et al. 2010), we provide an analysis of the policy factors related to the decision and present several scenarios for the future evolution of U.S. accounting standards in light of the current global movement toward IFRS.

Income Conservatism in the U.S. Technology Sector

2011 ◽  
Vol 25 (2) ◽  
pp. 285-314 ◽  
Author(s):  
Uday Chandra
Keyword(s):  
Financial Statements ◽  
Cash Flows ◽  
Data Availability ◽  
Financial Statement ◽  
Litigation Risk ◽  
Technology Sector ◽  
Technology Firms ◽  
Conservative Accounting ◽  
Accounting Accruals ◽  
The U.S

SYNOPSIS I investigate the extent and nature of income conservatism in the financial statement numbers of firms in the U.S. technology sector. Technology firms are predicted to have greater income conservatism than other U.S. firms because they are subject to both higher shareholder litigation risk and conservative accounting standards such as SFAS 2. In the absence of a generally accepted measure of conservatism, I examine several proxies, including loss incidence and accounting rates of return, operating cash flow and nonoperating accrual levels, and regression coefficients from the earnings-return model in Basu (1997). Relative to other companies, technology firms' earnings are characterized by higher (and intertemporally increasing) levels of both conditional and unconditional conservatism. These differences are both statistically and economically significant. Further analysis suggests that technology firms' higher conservatism results primarily from lower operating cash flows due to R&D expensing and more income-decreasing accounting accruals linked to litigation risk. The results of this study are potentially useful to financial analysts, researchers, regulators, managers, and other users of financial statements. Data Availability: Data are available from public sources.

How Would the Mandatory Adoption of IFRS Affect the Earnings Quality of U.S. Firms? Evidence from Cross-Listed Firms in the U.S.

2011 ◽  
Vol 25 (4) ◽  
pp. 837-860 ◽  
Author(s):  
Jerry Sun ◽  
Steven F. Cahan ◽  
David Emanuel
Keyword(s):  
Earnings Quality ◽  
Discretionary Accruals ◽  
Earnings Persistence ◽  
Listed Firms ◽  
Ifrs Adoption ◽  
The Cross ◽  
The Impact ◽  
Timely Loss Recognition ◽  
The U.S

SYNOPSIS We examine the impact of IFRS adoption on the earnings quality of foreign firms cross-listed in the U.S. from countries that have already adopted IFRS on a mandatory basis. We use the cross-listed firms as surrogates for the U.S. firms so we can observe the effect of IFRS adoption in the U.S. We examine five measures of earnings quality related to discretionary accruals, target beating, earnings persistence, timely loss recognition, and the earnings response coefficient (ERC). To isolate the effect of IFRS adoption, we use a matched sample design where each cross-listed firm is matched to a U.S. firm. We find the difference in earnings quality from the pre- to post-IFRS period is not different for the cross-listed and matched firms when earnings quality is measured by absolute discretionary accruals, timely loss recognition, or a long-window ERC. However, for the incidence of small positive earnings and earnings persistence, we find significant difference-in-differences, indicating that IFRS adoption led to an improvement in earnings quality for cross-listed firms relative to the matched firms. Our results are slightly surprising since U.S. GAAP is generally viewed as high-quality standards with little room for improvement.

scholarly journals An Investigation IFRS Adoption in Malaysia on The Relationship between The Audit Committee and Quality of Financial Statement

2018 ◽  
Vol 2 (2) ◽  
pp. 115-122
Author(s):  
Citrawati Jatiningrum ◽  
Fauzi Fauzi ◽  
Rita Irviani ◽  
Mujiyati Mujiyati ◽  
Shahanif Hasan
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Committee ◽  
Financial Statement ◽  
Committee Meeting ◽  
Ifrs Adoption ◽  
Financial Expertise ◽  
The Relationship ◽  
Post Period

Audit committees are one of Corporate Governance (CG) mechanisms which are the significant factor in improving its role in inhibiting financial statement fraud (Choi, Jeon & Park, 2004; Habbash, 2010; Soliman & Ragab, 2014). Quality of the Financial Statement emphasised as being in compliance with accounting standards accepted in general, the disclosure scale, and reported numbers although this is not merely a task for the IFRS (Cascino & Gassen, 2010). In recent years, the issue of IFRS adoption in developed and developing countries have been a great deal of attention from many researchers. However, regarding the relationship between the Audit Committee and Quality of Financial Statement with IFRS requirements is still questioning. In fact, the results obtained from some previous researches are inconsistent. Therefore, the objectives in this study are aims to investigate whether post the mandatory IFRS adoption in Malaysia would limit earnings management practice in highlights of governance monitoring on the quality of financial reporting in this environment. This paper gives some evidence: 1) The effect of pre- and post IFRS adoption in Malaysia in the relationship between the Audit Committee and earnings management adoption. 2) examine the differences of the level earnings management on two periods of IFRS adoption in Malaysia. Quality of Financial statement in this study was measured by the level of earnings management with discretional accrual (DA) proxy. The audit committee variable measured by Audit Committee Independence (ACIND), Audit Committee Financial Expertise (ACFEX), Audit Committee Meeting (ACMEET), Audit Committee Size (ACSIZE) and control variable in this study using Board Size (BRDSIZE) and Firm Leverage (FRMLEV). The sample of this study including the two main time periods, there are pre-IFRS adoption and post-IFRS adoption. Using 81 listed companies in Malaysia as a sample, with 567 observations is analysed from 2009 to 2015 (7 years observations) with purposive judgement sampling selection. For seven years, a total of 567 observations is analysed. The pre- IFRS adoption period was tested from 2009 through 2011, and the post-IFRS adoption was tested from 2012 through the end of 2015. The findings in this study with multiplied regression analysis revealed that the hypothesis test in a period of pre- and post IFRS adoption ACFEX and FIRMLEV statistically were significance at 5% level. It means that Audit Committee Financial Expertise (ACFEX) have a significant effect on earnings management practise. According to the result found in the post IFRS adoption period, Audit Committee Meeting (ACMEET) is significant. It means that the frequency of audit committee meetings could be decreasing the level of discretionary accrual. The evidence also unveils both of ACIND and ACSIZE at 5 % level p-value is not significant. The most important result finding on pre- and post period of IFRS adoption in Malaysia provide evidence that based on the statistically significant was upward or the relation more significantly. However, this study also reported with paired sampled test analysis there was no significant difference between the level of earnings management in pre- and post period the adoption of IFRS in Malaysia at 5% level significance.  An important contribution this study has the impact on practices and has implications useful for regulators. The study provides empirical evidence that a relationship between the audit committee and earnings management in the case of IFRS adoption. In contributing to the strength of governance quality and FRQ need to be revisited, especially after mandatory IFRS adoption. Though the audit committee and audit quality are implicitly mentioned in the CG act, it is recommended that formulates specific rules relating to the quality of Financial Reporting. In this regard, it is suggested that company reports would be presented high quality in financial reporting to provide appropriate responses to recommendations made in the reports. Finally, these findings suggest that CG practices in Malaysian that have its own peculiar characteristics compared to other emerging economies.      

scholarly journals Mandatory IFRS Adoption and Financial Statement Comparability

2012 ◽  
Author(s):  
Francois Brochet ◽  
Alan D. Jagolinzer ◽  
Edward J. Riedl
Keyword(s):  
Financial Statement ◽  
Ifrs Adoption
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