Abstract
The aim of the article is to identify canonical correlations among performance indicators calculated from a base of accounting statements prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP), Brazilian accounting standards (BR GAAP) and International Financial Reporting Standards (IFRS). Descriptive research with a quantitative approach was carried out. A research sample of 50 companies was selected, including 17 Brazilian companies listed on the Bovespa’s Board of Corporate Governance and 33 English companies listed on the London Stock Exchange, all of which trade American Depositary Receipts on the New York Stock Exchange. The results demonstrate divergence between companies and indicators in relation to differences calculated in performance indicators as well as statistically significant canonical correlations in both groups researched. The performance indicators of Brazilian and English companies were not affected in any significant way, despite divergences between BR GAAP and US GAAP and between IFRS and US GAAP. However, stands out as the main limitation that no company listed on Bovespa was found in the lists of European stock exchanges, which was necessary in order to verify the differences in these companies’ indicators in the conversion of their accounting statements from BR GAAP to US GAAP and IFRS. This required the adoption of an alternative (i.e., canonical correlations). The main implication of this study is that the impact of IFRS adoption by Brazilian companies may be less than the expected, in terms of improvement of accounting quality and cost of adoption. The article advances research on a comparative study of the financial disclosures made according to Brazilian, American and international accounting standards, supported by an analysis of performance indicators calculated from accounting statements prepared from and based on these standards. Key words: Performance indicators, accounting statements, BR GAAP, US GAAP, IFRS, canonical correlations.
Highlights
The objective of the article is to identify canonical correlations between performance indicators calculated from a base in accounting statements prepared according to Brazilian and American accounting standards and to International and American accounting standards
The performance indicators calculated based on accounting statements elaborated in BR GAAP are strongly related to those calculated from accounting statements elaborated in US GAAP
In terms of the global analysis of the impact of the divergences in accounting standards on companies’ performance indicators, we found correlation coefficients of 99.88 and 99.22%, respectively, in the two related groups (BR GAAP and US GAAP, and International Financial Reporting Standards (IFRS) and US GAAP)
Summary
The separation between capital and management has brought asymmetric information problems, which in this study are analysed from an external investor perspective. Taxation domestic investors can be configured as an asymmetric information problem within the scope of Agency Theory. The publication of audited accounting statements is one example of how accounting information functions as a reducer of information asymmetry.
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