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

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 adjustmen...

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Bibliographic Details
Published in:Asia-Pacific journal of accounting & economics 2021-11, Vol.28 (6), p.674-695
Main Authors: Kim, Joonhyun, Jung, Sukyoon, Ha, Mihye
Format: Article
Language:English
Subjects:
consolidated reporting
earnings announcement
IFRS adoption
IFRS reconciliation
information content
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Summary: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).
ISSN:1608-1625
2164-2257
DOI:10.1080/16081625.2018.1517601