 Does mandatory IFRS adoption affect large and small public firms' accounting quality differently? Evidence from CanadaGulraze Wakil and Karin A. Petruska Advances in accounting, 2022, vol. 57, issue C Abstract: Canada adopted International Financial Reporting Standards (IFRS) in 2011. We investigate the impact of this mandatory change by examining whether value relevance and non-market-based accounting information changed for a comprehensive set of Canadian companies on the Toronto Stock Exchange (TSX). Our findings reveal the effects of IFRS adoption are not consistent across all firms as demonstrated by a minimal change in value relevance for large firms, but a significant increase for small firms. These differences are primarily attributed to the weakening (strengthening) relationship of book value to stock price for large (small) firms and a strengthening (weakening) relationship of earnings to stock price for large (small) firms. This suggests the goal of IFRS in providing improvement to the balance sheet is only achieved for small firms in Canada. For the non-market-based accounting quality measures of earnings persistence, earnings smoothing, earnings discretion, and the frequency of small profits to losses, the findings are mixed for large firms, but improve for small firms after IFRS adoption. Keywords: IFRS; Accounting quality; Value relevance; Book value; Canada (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:57:y:2022:i:c:s0882611022000177 DOI: 10.1016/j.adiac.2022.100598 Access Statistics for this article Advances in accounting is currently edited by Dennis Caplan More articles in Advances in accounting from Elsevier |
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