Voluntary IFRS Adoption by Unlisted European Firms: Impact on Earnings Quality and Cost of Debt

Mara Cameran and Domenico Campa ()
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Mara Cameran: Bocconi University, Department of Accounting, Via Roentgen 1, 20136 Milan, Italy
Domenico Campa: International University of Monaco, INSEEC U Research Center, 16 Rue Clerissi, 98000 Monaco, Principality of Monaco

The International Journal of Accounting (TIJA), 2020, vol. 55, issue 03, 1-36

Abstract: This paper investigates the impact of the voluntary adoption of International Financial Reporting Standards (IFRS) by unlisted firms on both their financial reporting quality and cost of debt. Using a large international sample of unlisted EU companies for which the choice of IFRS is voluntary, we find that IFRS adoption has a positive impact on financial reporting quality and results in a decrease in the cost of debt. In addition, unlisted firms adopting IFRS are more likely to be acquired or go public in the years subsequent to the adoption, relative to other unlisted firms. We document a tangible benefit of voluntary IFRS adoption by unlisted firms.

Keywords: Voluntary IFRS adoption; unlisted firms; earnings quality; cost of debt (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:wsi:tijaxx:v:55:y:2020:i:03:n:s1094406020500134

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DOI: 10.1142/S1094406020500134

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