Consolidated financial reporting and the effect of mandatory IFRS adoption on the information content of earnings announcements: evidence from Korea

Joonhyun Kim, Sukyoon Jung and Mihye Ha

Asia-Pacific Journal of Accounting & Economics, 2021, vol. 28, issue 6, 674-695

Abstract: We examine the effect of mandatory IFRS adoption on the information content of earnings announcement in Korea, and its main driving factors. We find an increase in earnings information content with IFRS adoption; however, this increase is only weakly associated with the IFRS reconciliation adjustment, as a proxy for accounting rule differences. In contrast, we observe a strong association between the availability of consolidated financial statements and the increase in information content. Collectively, our analysis contributes to understanding the source of the IFRS effect, by providing new evidence of the crucial role of disclosure policy changes in consolidated reporting.Abbreviation: International Financial Accounting Standards (IFRS).

Date: 2021
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DOI: 10.1080/16081625.2018.1517601

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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