The globalization of financial markets worldwide has progressively pushed toward simultaneous globalization of accounting information. Thus, during the last 50 years, categories of preparers, users, and regulators have devoted their efforts to support the global comparability of financial reporting aiming at favoring the comparison of corporates’ financial performances at a cross-country level. In the same vein, IASB, national standard setters, and jurisdictions have participated in and given momentum to this process. At the same time, academic research has followed this process and tried to build a theoretical framework to address the related issues, to assess the impact on preparers, users, and regulators, while defining hindrances and obstacles to the comparability of financial reporting especially in an IFRS environment.
In this context, this book reviews research studies on the comparability of financial reporting at a global level as well as highlights empirical analyses that demonstrate the extent to which global comparability has been achieved, and how it enhances value relevance of earnings across countries. It also looks at the cross-country investors’ perspectives by shaping the empirical analysis to provide further insights on the role of the "Big Four" auditing services in enhancing the comparability of earnings. The book provides an original contribution to the current debate about the comparability of financial reporting under IFRS and will be useful for researchers in the field.
Author(s): Francesco De Luca, Ho-Tan-Phat Phan
Series: SIDREA Series in Accounting and Business Administration
Edition: 2
Publisher: Springer
Year: 2022
Language: English
Pages: 136
City: Cham
Preface
Contents
List of Abbreviations and Acronyms
Chapter 1: Comparability as a Driver of Financial Reporting Quality
1.1 The Function of Accounting Information across International Markets
1.2 Pursuing Comparability of Financial Reporting
1.3 The Pathway to Achieve Global Comparability in Financial Reporting
1.3.1 The Activity of the IASC and its Evolution into the IASB
1.3.2 The Convergence Project between IASB and FASB
1.3.3 Legitimacy Theory to Explain the Harmonization Vs. Standardization of Accounting Standards: The Case of the USA and the ...
References
Chapter 2: Criticalities Along the Path to Global Comparability of Financial Reporting
2.1 Obstacles in Adoption of Accounting Standards
2.2 Obstacles in Application of Accounting Standards
2.2.1 Obstacles in Enforcement of Accounting Standards
References
Chapter 3: The Role of Auditing in Global Comparability of Financial Reporting
3.1 The Role of Auditing in Assuring Financial Reporting Quality
3.2 Audit Services as a Company Level Option to Achieve Comparability of Financial Reporting
References
Chapter 4: Cross-Country Empirical Analysis on IFRS-Based Financial Reports
4.1 Comparability Measurement in Accounting Literature
4.2 Comparability Measurement by R Programming Language
4.2.1 Accessing Data by R
4.2.2 Construction of Sample of Cross-Border Listed Firms
4.2.3 Measuring Comparability
Compute Quarterly Returns
Compute Quarterly Earnings
Compute Comparability
4.2.4 The Final Sample
4.3 Comparability Assessment of Corporates´ Earnings across Countries
4.4 How Does Comparability Enhance Value Relevance of Earnings across Countries?
4.4.1 Introduction to Value Relevance Concept and Modeling
4.4.2 Comparability Enhancing Value Relevance Modeling
4.4.3 Results
4.4.4 Models Comparison
4.4.5 Further Robustness Test
4.5 The Role of Auditing on Comparability
4.5.1 Comparison of Comparability Characteristic between Big4 Audited Firms and Non-Big4 Audited Firms
4.5.2 Difference in the Enhancing Relationship of Comparability between Big4 Audited Firms and Non-Big4 Audited Firms
4.5.3 Results
4.6 Main Findings of the Empirical Analyses
References
5: Conclusion
References
