The impact of IFRS adoption on the accuracy and dispersion of analysts' forecasts in the Brazilian stock market

Rafael Gatsios (), Fabiano Lima () and Vinícius Magnani ()
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Rafael Gatsios: University of São Paulo
Fabiano Lima: University of São Paulo
Vinícius Magnani: University of São Paulo

Economics Bulletin, 2018, vol. 38, issue 4, 2389-2398

Abstract: This study aims to analyze the impact of adopting international accounting standards on the accuracy and dispersion of analysts' forecasts in the Brazilian stock market. Data were extracted from the Institutional Brokers Estimate System (IBES) database and reference forms of companies published on the Brazilian Securities and Exchange Commission's website for the period 2000–2015. The difference-in-differences methodology was used to compare the results of companies that voluntarily adopted the IFRS with those of companies that adopted the IFRS after the mandatory adoption period. The results suggest that mandatory IFRS adoption contributed to an increase in the accuracy of analysts' earnings forecasts for non-financial companies, while it did not significantly impact the dispersion of analysts' forecasts. These findings suggest that IFRS adoption contributed to an increase in the quality of analysts' earnings forecasts, providing investors with more security when utilizing this information for decision-making.

Keywords: analysts' forecast; IFRS; accuracy; dispersion. (search for similar items in EconPapers)
JEL-codes: G1 G3 (search for similar items in EconPapers)
Date: 2018-12-13
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