Mandatory IFRS adoption, investor protection and earnings management

Ahmed Kouki

International Journal of Accounting & Information Management, 2018, vol. 26, issue 1, 187-204

Abstract: Purpose - The purpose of this paper is to examine the effect of investor protection on earnings management before and after IFRS adoption. Design/methodology/approach - A sample of 106 companies listed on Germany, France and Belgium stock markets for the pre-IFRS (2000-2004) and post-IFRS (2006-2011) periods was used. This research is based on a comparative study between the pre- and the post-IFRS periods. Findings - The results showed that investor protection better explains earnings management after the transition to IFRS. The findings revealed that international standards and investor protection are significant in jointly explaining earnings management for the second reporting period. Originality/value - The study gives rise to a score that is considered as a proxy of investor protection that regroups several macroeconomic indexes.

Keywords: Agency theory; Earnings management; IFRS adoption; Investor protection; M41; G15; F62 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijaimp:ijaim-07-2017-0091

DOI: 10.1108/IJAIM-07-2017-0091

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