 The impact of the 2007 reforms in China on the quality of earningsSiming Liu, Len Skerratt and Shaomeng Li Journal of Chinese Economic and Business Studies, 2016, vol. 14, issue 2, 193-209 Abstract: Prior to 2007, in order to encourage international investment, China operated two parallel financial reporting systems, one based on Chinese GAAP for domestic investors and the other based on IFRS for international investors. In 2007, after a series of reforms to harmonise Chinese GAAP with IFRS, this system was replaced by a single set of standards for both classes of investor. We evaluate the impact of this significant change on earnings quality for stocks quoted on the Shanghai and Shenzhen stock exchanges for the period 2003--2013. Using tests of earnings smoothing and early loss recognition, we identify three key features. Firstly, earnings quality improved consistently over the period. Secondly, prior to the reforms of 2007, IFRS earnings were of superior quality to Chinese GAAP earnings. A third and important finding is that earnings quality under Chinese GAAP after the 2007 reforms is comparable to that under pre-2007 IFRS. Date: 2016 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:jocebs:v:14:y:2016:i:2:p:193-209 Ordering information: This journal article can be ordered from DOI: 10.1080/14765284.2016.1163003 Access Statistics for this article Journal of Chinese Economic and Business Studies is currently edited by Professor Xiaming Liu More articles in Journal of Chinese Economic and Business Studies from Taylor & Francis Journals |
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