Transition to IFRS and value relevance in a small but developed market: A look at Greek evidence

Ioannis Tsalavoutas, Paul Andre and Lisa Evans
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Lisa Evans: Department of Accounting and Finance - University of Stirling

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Abstract: We examine the value relevance of accounting fundamentals after the mandatory transition to IFRS in Greece. We find no significant change in the value relevance of book value of equity and earnings between the 2004 pre IFRS and 2005 post IFRS periods and conclude that the accounting framework is not in itself sufficient for changing market participants' perception about value relevance of accounting information. However, market participants viewed the extra information provided by reconciliations between Greek GAAP and IFRS for 2004 figures as incrementally value relevant. Specifically, this applied to adjustments resulting from standards curtailing previous creative accounting practices and was mainly driven by firms with lower reporting quality (smaller firms and firms with non-‘Big 4' auditors).

Keywords: Value relevance; IFRS implementation; Greece; creative accounting; firm size; audit quality.; audit quality (search for similar items in EconPapers)
Date: 2009-05-27
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00460532
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Citations: View citations in EconPapers (3)

Published in La place de la dimension européenne dans la Comptabilité Contrôle Audit, May 2009, Strasbourg, France. pp.CD ROM

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