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Heterogeneity in accounting quality after the adoption of IFRS: evidence from Brazil

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Roberto Black
Total Authors: 1
Document type: Master's Dissertation
Press: Ribeirão Preto.
Institution: Universidade de São Paulo (USP). Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto (PCARP/BC)
Defense date:
Examining board members:
Sílvio Hiroshi Nakao; Antonio Lopo Martinez; Rodrigo dos Santos Verdi
Advisor: Sílvio Hiroshi Nakao

This work aims to investigate the existence of heterogeneity in the quality of accouting information after the adoption of IFRS. The adoption of IFRS is generally associated with an increased quality of the financial statements. However, companies within the same country probably have different economic incentives regarding the disclosure of information. Accordingly, treat companies evenly, without considering the linked economic incentives, could contaminate the identification of information quality after the adoption of IFRS. It examined the case of Brazil, a country classified as code-law, whose tax laws induced the accounting practice and whose adoption of IFRS is mandatory. First, Brazilian companies listed on the BOVESPA were separated into two groups, namely: companies issuing ADRs to the adoption of IFRS and the companies that have not issued ADR to the adoption of IFRS. Then, this second group of companies were grouped by means of a cluster analysis in two different subgroups based on economic incentives in common. Then, based on the identified groups, the accounting quality information is tested for each group before and after the adoption of IFRS. This work uses the timely recognition of economic events, value relevance of net income and earnings management as proxies for the quality of accounting information. The results suggest that a particular group of companies obtained, in fact, an increase of accounting information quality after adoption of the IFRS in Brazil. This group of companies would have sufficient incentives to leave behind the accounting and tax compliance and provide superior quality to your set of accounting information disclosed. In addition, a second group of companies with quality of accounting information was checked before and after 2008. In contrast, a third group of companies has been identified that did not show quality of accounting information either before or after 2008. These results support the assumption that incentives at the level of companies have an important role in the quality of financial statements. This does not imply stating that accounting standards do not matter, but that there are other drivers that shape the quality of financial statements and accounting standards should be seen as one of those drivers. (AU)

FAPESP's process: 14/01403-4 - Identifying companies with incremental quality after the adoption of IFRS in Brazil
Grantee:Roberto Black
Support Opportunities: Scholarships in Brazil - Master