Mandatory adoption of IFRS in Latin America: A boon or a bias

André Aroldo Freitas de Moura and Jairaj Gupta

Journal of International Financial Markets, Institutions and Money, 2019, vol. 60, issue C, 111-133

Abstract: Exploiting the unique feature that Latin American countries have not undergone a significant change to the enforcement of accounting standards and investor protection mechanisms, we investigate whether mandatory adoption of IFRS and firm-level reporting incentives improve analysts’ information environment in Latin American countries (Argentina, Brazil, Chile, Mexico and Peru), and whether the precision of public, private and consensus information improve after IFRS adoption. Test results show that mandatory adoption of IFRS and firm-level reporting incentives improve analysts’ information environment. Overall, we confirm the positive effects of IFRS adoption, because the precision of public and consensus information is enhanced.

Keywords: IFRS; Analysts’ information environment; Forecast accuracy; Target price forecast dispersion; Investor protection mechanisms (search for similar items in EconPapers)
JEL-codes: G14 G18 M40 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:60:y:2019:i:c:p:111-133

DOI: 10.1016/j.intfin.2018.12.016

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