ISSN (Print): 2333-8849

ISSN (Online): 2333-8857

Currrent Issue: Volume 3, Number 3, 2015

Article

The Impact of International Financial Reporting Standards (IFRS) on Earnings Management: A Review of Empirical Evidence

1Department of Commerce and Business Administration, Acharya Nagarjuna University, Andhra Pradesh, India


Journal of Finance and Accounting. 2015, 3(3), 57-65
doi: 10.12691/jfa-3-3-3
Copyright © 2016 Science and Education Publishing

Cite this paper:
Indiael Daniel KAAYA. The Impact of International Financial Reporting Standards (IFRS) on Earnings Management: A Review of Empirical Evidence. Journal of Finance and Accounting. 2015; 3(3):57-65. doi: 10.12691/jfa-3-3-3.

Correspondence to: Indiael  Daniel KAAYA, Department of Commerce and Business Administration, Acharya Nagarjuna University, Andhra Pradesh, India. Email: indiael30@gmail.com

Abstract

The International Financial Reporting Standards (IFRS), the best breed, high quality and principle based reporting standards removes many allowable accounting alternatives [15]. It is therefore, consequently expected to limit the management’s discretion and lessen practices on earnings management [14]. Quite the opposite, some researchers squabble, that litheness instinctive in IFRS and its fair value pre-eminence might afford greater opportunities for firms to manage earnings [17,21]. It is this incongruity which incited and aggravated the conduct of this study. This study applies a desktop review to investigate the worldwide existing empirical research evidence on the impact of IFRS on earnings management post- IFRS adoption and in relation to other reporting standards and reports whether the results are indistinguishable between developed and developing economies. The findings reveal that the existing empirical crams and conclusions there on are mixed, inconsistent and difficult to generalise. This indicates the pressing need for country specific empirically tested studies of this nature. The study further, stumbles on the fact that IFRS can indistinctly benefit both developing and developed markets when coupled with appropriate effective enforcement machinery. Substantially, the results entail that IFRS is a critical determinant for quality reporting but not a ‘prima facie’ guarantor for quality reporting.

Keywords

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Article

The Intermediation Functions of Finance Companies and Economic Growth: Issues, Theory and Empirical Evidence from Nigeria

1Department of Banking and Finance, Faculty of Management Sciences, Rivers State University of Science and Technology, Port Harcourt Nigeria


Journal of Finance and Accounting. 2015, 3(3), 47-56
doi: 10.12691/jfa-3-3-2
Copyright © 2015 Science and Education Publishing

Cite this paper:
Igbanibo Dumini Solomon, Iwedi Marshal. The Intermediation Functions of Finance Companies and Economic Growth: Issues, Theory and Empirical Evidence from Nigeria. Journal of Finance and Accounting. 2015; 3(3):47-56. doi: 10.12691/jfa-3-3-2.

Correspondence to: Igbanibo  Dumini Solomon, Department of Banking and Finance, Faculty of Management Sciences, Rivers State University of Science and Technology, Port Harcourt Nigeria. Email: igbanibos@yahoo.com

Abstract

This paper examines the linkage between finance companies intermediation functions and economic growth in Nigeria. Using an annual time series data spanning the period of 1992 -2014 with the application of the estimation techniques of ordinary least square (OLS), co integration test, alongside granger causality test. The Global statistic results indicates that about 80% of the variations in GDP for the estimation period were captured by the explanatory variables. The relative statistic results showed evidence for strong and positive correlation between NLA and GDP in both short run and long run. Causality runs Bi-directionally between INV and GDP and Uni-directionally between NLA and GDP. The study conclude that financial intermediation functions of finance companies has a prominent role in determining the performance of the Nigeria economy. As such there should be an effective regulatory framework for finance companies operations in Nigeria with the view of improving financial intermediations services. It further recommends that there should be collaboration between finance companies and other financial institutions with the view of building a robust financial system in Nigeria. By ways of policy statement public awareness on the existence and function of finance companies be made to increase their patronage.

Keywords

References

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Article

The Intenational Financial Reporting Standards (IFRS) and Value Relevance: A Review of Empirical Evidence

1The Institute of Finance Management (IFM), Dar es Salaam, Tanzania: Current Research Scholar Acharya Nagarjuna University,India


Journal of Finance and Accounting. 2015, 3(3), 37-46
doi: 10.12691/jfa-3-3-1
Copyright © 2015 Science and Education Publishing

Cite this paper:
Indiael Daniel KAAYA. The Intenational Financial Reporting Standards (IFRS) and Value Relevance: A Review of Empirical Evidence. Journal of Finance and Accounting. 2015; 3(3):37-46. doi: 10.12691/jfa-3-3-1.

Correspondence to: Indiael  Daniel KAAYA, The Institute of Finance Management (IFM), Dar es Salaam, Tanzania: Current Research Scholar Acharya Nagarjuna University,India. Email: indiael30@gmail.com

Abstract

Value relevance is widely applied as a construct and proxy for accounting quality. It is measured as the statistical association between financial statement figures and stock market values ([63] pg.302). It is inferred that the higher the association the higher the accounting quality [16] and more useful the accounting numbers issued by firms are to the valuation decisions by investors ([41], pg.5). This explanatory study uses desktop and library methodology to explore and present the worldwide extant empirical research evidence on the IFRS value relevance. The paper reveals that existing empirical studies have concentrated in developed capital markets with growing interest in developing countries context and report mixed and incoherent results which are difficult to generalize. It further divulges that IFRS can be equally useful in developed and frontier capital markets when coupled with appropriate enforcement mechanisms. The results from the review imply that IFRS is a critical determinant for quality reporting but not a conclusive determinant. I call for country specific empirically verified studies which assess impact of IFRS on value relevance in developing capital markets where they are especially lacking.

Keywords

References

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