Transition to IFRS in Greece: financial statement effects and auditor size

Ioannis Tsalavoutas and Lisa Evans

Managerial Auditing Journal, 2010, vol. 25, issue 8, 814-842

Abstract: Purpose - The paper aims to explore the impact of the transition to International Financial Reporting Standards (IFRS) on Greek listed companies' financial statements with a focus on net profit, shareholders' equity, gearing and liquidity. It also seeks to examine any differences in the impact across the sub‐samples of companies with Big 4 and non‐Big 4 auditors. Design/methodology/approach - In line with recent literature, the paper employs Gray's comparability index. The sample consists of 238 Greek companies, representing 75 per cent of the companies listed on the Athens Stock Exchange at the end of March 2006. Findings - Implementation of IFRS had a significant impact on financial position and reported performance as well as on gearing and liquidity ratios. On average, impact on shareholders' equity and net income was positive while impact on gearing and liquidity was negative. Only companies with non‐Big 4 auditors faced significant impact on net profit and liquidity. They also faced a significantly greater impact on gearing than companies with Big 4 auditors. A large number of companies with material negative changes is identified, suggesting that transition to IFRS and the fair value option does not necessarily result in higher shareholders' equity figures. Many companies provided inadequate transitional disclosures. This is significantly related to auditor size. Practical implications - The findings suggest that reporting quality has improved under the new accounting regime, especially for companies with non‐Big 4 auditors. Originality/value - Prior literature indicates that the impact revealed in companies' reconciliation statements can have significant effects on users' decision making. On that basis, the study can stimulate future research and is relevant to standard setters and regulators.

Keywords: Accounting; Auditors; Greece; Standards (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:majpps:02686901011069560

DOI: 10.1108/02686901011069560

Access Statistics for this article

Managerial Auditing Journal is currently edited by Professor Jie Zhou

More articles in Managerial Auditing Journal from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().