Mandating IFRS in an Unfavorable Environment: The Greek Experience

Nikolaos I. Karampinis and Dimosthenis Hevas ()

The International Journal of Accounting, 2011, vol. 46, issue 3, 304-332

Abstract: There is an ongoing debate concerning the efficacy of mandating high-quality accounting standards in unfavorable economies with inadequate institutional infrastructures. Greece provides us with an example of an unfavorable jurisdiction for enforcement of International Financial Reporting Standards (IFRS) due to its code-law tradition, bank orientation, concentrated corporate ownership, poor shareholders' protection, and low regulatory quality. Assuming that these conditions undermine managers' and auditors' incentives for high-quality financial reporting, how likely is it that mandating IFRS in such an environment will be effective? To address this research question, we explore potential effects of IFRS enforcement on two salient properties of accounting income: value relevance and conditional conservatism. Our results indicate only minor improvements in both of them after IFRS implementation.

Keywords: IFRS; Reporting; incentives; Value; relevance; Conditional; conservatism; Greece (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (28)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:accoun:v:46:y:2011:i:3:p:304-332

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