Abstract
This study examines the impact of IFRS adoption on the information content of reported earnings in Malaysia. This is based on an investigation of the information content of earnings for the years 2004 to 2008, involving 2521 firm-year observations. Overall, the results indicate that IFRS adoption has positive impact on the information content of earnings. However, the results revealed that earnings demonstrated higher information content during the periods before the adoption of the IFRS. The lower information content of earnings revealed in the year of the adoption and subsequent year infers that the financial reporting infrastructure is moving towards full convergence with the IFRS. Once this is accomplished, it is expected that the adoption of IFRS in Malaysia will result in information-oriented financial reports that provide useful information to investors and other stakeholders. This is consistent with the improved information content of earnings in 2008. These findings provide regulatory bodies with enhanced understanding in their efforts to improve the financial reporting quality in Malaysia.
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