TY - JOUR
T1 - Disclosure incentives, mandatory standards and firm communication in the IFRS adoption setting
AU - Wee, Marvin
AU - Tarca, Ann
AU - Chang, Millicent
PY - 2014
Y1 - 2014
N2 - We investigate the content, timing and relevance of firms' narrative disclosure about the effects of IFRS adoption in annual statutory financial statements and firm announcements to the stock exchange for 150 large listed Australian firms in the three-year period surrounding adoption (which occurred from 1 January 2005). We observe communication about changes in financial reports, even when the change relates to accounting rather than economic events. We record more disclosure by firms experiencing an adverse change in earnings, consistent with them being sensitive to signals about future earnings. When economic performance is stronger, firms provide less discussion of the accounting effects of IFRS. We also find the discussion of IFRS impact in both disclosure channels is value-relevant for firms with relatively higher levels of disclosure, providing evidence of the usefulness of transition disclosures. © The Author(s) 2013.
AB - We investigate the content, timing and relevance of firms' narrative disclosure about the effects of IFRS adoption in annual statutory financial statements and firm announcements to the stock exchange for 150 large listed Australian firms in the three-year period surrounding adoption (which occurred from 1 January 2005). We observe communication about changes in financial reports, even when the change relates to accounting rather than economic events. We record more disclosure by firms experiencing an adverse change in earnings, consistent with them being sensitive to signals about future earnings. When economic performance is stronger, firms provide less discussion of the accounting effects of IFRS. We also find the discussion of IFRS impact in both disclosure channels is value-relevant for firms with relatively higher levels of disclosure, providing evidence of the usefulness of transition disclosures. © The Author(s) 2013.
U2 - 10.1177/0312896213481366
DO - 10.1177/0312896213481366
M3 - Article
VL - 39
SP - 265
EP - 291
JO - Australian Journal of Management
JF - Australian Journal of Management
SN - 0312-8962
IS - 2
ER -