Impact Of Mandatory IFRS Adoption Research Articles

The Impact of International Financial Reporting Standards on Aggressive Accrual: Evidence from Saudi Security Exchange

Purpose: This study investigated the impact of international financial reporting standards on aggressive accrual. The distinguishing feature of this research is the study of the recent adoption of international financial reporting standards in one of the most important economies and emerging markets in the world; the Saudi Security Exchange (Tadawul).   Theoretical framework: One important issue that has dominated accounting research for many years is the mandatory IFRS adoption. More specifically, the impact of mandatory IFRS adoption on accounting figures, notably accruals. Most of the studies document mixed effects resulting from IFRS adoption.   Design/methodology/methodology: This study focuses on Kingdom of Saudi Arabia's Financial Market due to the recent mandatory adoption of the IFRS by Saudi companies in 2017, using 781 firm-year observations. Our study sample will cover 6 years from 2014-2019, three years before adoption (2014-2015-2016) and three years after adoption (2017-2018-2019).   Find: The findings of this study were consistent with previous accounting literature. The study shows a decrease in aggressiveness accruals after adopting international financial reporting standards. The study concluded that the companies listed on the Saudi Stock Exchange (Tadawul), especially after the adoption of international financial reporting standards, do not often provide inflated financial reports with distractions that could lead to customers making irrational decisions.   Research, practical and social implications:  This study put a spotlight on Aggressive Accrual resulting from mandatory IFRS adoption in emerging markets, such as the Kingdom of Saudi Arabia's Financial Market. Therefore, this study provides an exciting opportunity to advance standards setters’ knowledge of the quality of financial reporting in emerging markets.   Originality/value: This is the first study to use Aggressive Accrual around mandatory IFRS adoption. worth noting that apart from the prior literature, no study was devoted to the aggressive accrual in the Kingdom of Saudi Arabia's Financial Market.

Response to “Re-Examining the Impact of Mandatory IFRS Adoption on IPO Underpricing” by Byard, Darrough, and Suh (2021)

Response to “Re-Examining the Impact of Mandatory IFRS Adoption on IPO Underpricing” by Byard, Darrough, and Suh (2021)

The impact of mandatory IFRS adoption on earnings management: Evidence from Morocco: A multinomial logit approach

The purpose of this paper is to investigate whether the transition to IAS/IFRS deters or facilitates greater earnings management (Earnings smoothing), and assess the level of earnings management according to the accounting standards applied by companies listed on the Moroccan stock market. To achieve this goal, a logistic regression model is proposed to explain the effect of IFRS adoption in the Moroccan context. A quantitative study is carried out using a sample of 74 firms listed in the Casablanca Stock Exchange over a period of five years (2010-2015). As a result, we find convincing evidence that the implementation of IFRS contributed to less earnings management compared to the local accounting standards. This study should be of interest to regulators and policymakers as they are expected to assess the impacts of adopting IFRS.

IFRS 의무채택이 이익유연화에 미치는 효과

본 연구의 목적은 원칙기반 IFRS의 채택으로 경영자 재량권이 이전보다 더 증가(또는 감소)하고 있는지를 실증적으로 조사하는 것이다. 경영자 재량권 변동을 이익유연화의 강도를 비교하여 실증 검증한 Barth et al.(2008)과 유사하게, 본 연구도 이익유연화 강도가 K-GAAP과 IFRS 채택 기간 간에 차이가 있는지를 시계열 비교함으로써 IFRS 도입이 경영자 재량권에 미치는 효과를 분석한다. 특히 본 연구는 세 가지 측정방법(각각 순이익 변화의 변동성, 순이익과 영업현금흐름 변화의 변동성에 대한 비율, 영업현금흐름과 발생액 간의 상관관계)을 적용하여 이익유연화를 측정하고, 두 가지 보완적 분석방법과 다양한 비교기준을 적용하여 시계열 비교하였다. 2003년부터 2017년까지 상장기업을 대상으로 분석한 결과는 다음과 같다. 첫째, 전체 상장기업을 대상으로 IFRS 기간의 재무제표(각각 별도와 연결재무제표)와 K-GAAP 기간의 개별재무제표를 기준으로 이익조정의 강도를 측정하고 이를 시계열 비교한 결과, 이익유연화 강도는 K-GAAP보다 IFRS 기간에서 더 증가함을 확인하였다. 둘째, 계속 상장기업을 대상으로 대응표본을 구성하여 시계열 비교한 결과, IFRS 기간에서 이익유연화의 강도는 K-GAAP보다 약한 증가 행태를 보였다. 전반적으로 IFRS 채택 기간에서 이익유연화 행태는 K-GAAP 적용 기간보다 증가하는 경향을 보였고 이는 경영자의 재량권 행사가 IFRS 도입 이후에 더 증가했음을 의미한다. 본 연구의 결과는 IFRS 의무채택 이후에 기업이 경제적 실질에 부합하는 원칙적 회계처리 방법을 투명하게 적용하기보다는 원칙의 모호성과 이행지침 부재로 인해 발생한 경영자의 실무적 재량권을 이용하여 이익유연화를 강화하는 경향이 있음을 시사하고 있다.

Secrecy and the impact of mandatory IFRS adoption on earnings quality in Europe

This study examines how differences in national culture, as indicated by financial secrecy, affect the impact of mandatory adoption of IFRS on earnings quality across the countries of Europe. Using 24,034 firm-year observations from 16 European countries over the period 1998–2014, we find that the higher the level of secrecy in a country the lower the level of earnings quality of firms, as measured by signed abnormal accruals. We find that mandatory adoption of IFRS improves earnings quality in all countries. However, our study indicates that the impact of mandatory adoption of IFRS on earnings quality is stronger the higher the level of secrecy in a country. Our evidence thus helps to explain the different impacts of IFRS adoption on earnings quality across different jurisdictions.

Financial Statement-Based Forecasts and Analyst Forecasts of Profitability: The Effect of Mandatory IFRS Adoption

This study examines whether mandatory IFRS adoption is associated with an increase in the accuracy of financial statement-based models for forecasting profitability out-of-sample. The study also examines the relation between analyst forecast accuracy and financial statement-based forecast accuracy around mandatory IFRS adoption. We find significant improvement in financial statement-based forecast accuracy around mandatory IFRS adoption. We find significant improvement in analyst forecast accuracy around mandatory IFRS adoption only in countries that concurrently made substantial improvements to financial reporting enforcement. We also show that the improvement in analyst forecast accuracy is associated with the improvement in financial statement-based forecast accuracy and that analysts place more weight on financial statement-based forecasts after mandatory IFRS adoption in countries with concurrent changes in enforcement, while they place the same weight on financial statement-based forecasts after mandatory IFRS adoption in countries without concurrent enforcement changes. Finally, we document that financial statement-based forecasts provide incremental information over analyst forecasts for explaining year-ahead profitability for firms in countries that did not bundle mandatory IFRS adoption with concurrent changes in enforcement. These findings are important for understanding the impact of mandatory IFRS adoption on the predictive ability of financial statements and for understanding analysts’ use of financial statements around mandatory IFRS adoption.

Macroeconomic evidence on the impact of mandatory IFRS adoption on equity and debt markets

This study investigates whether mandatory IFRS adoption is associated with increased foreign portfolio investment into the adopting country’s debt and equity markets. Using macroeconomic data and a pre–post design centered in 2005, we find that IFRS adoption has a significantly greater effect on foreign debt than on foreign equity investment flows. This result is consistent with the notion that debt investors are greater consumers of financial statement information. We find that the increase in foreign equity investment around IFRS adoption is limited to countries that had higher governance quality, economic development, and creditor rights prior to adoption.In contrast, the increase in foreign debt investment around IFRS adoption is significant for all adopting countries independent of these characteristics.Finally, we find that the increase in foreign equity investment derives primarily from the U.S., whereas the increase in foreign debt investment derives from the U.S. and other non-adopting countries. The evidence that increases in foreign investment originate from non-adopting countries rather than other adopting countries suggests that the benefits from mandatory IFRS adoption more likely reflect improved financial reporting quality rather than greater financial statement comparability.

The Impact of Mandatory IFRS Adoption on IPOs in Global Capital Markets

ABSTRACT:This study examines the impact of mandatory IFRS adoption on IPO underpricing and the relative amount of IPO capital raised in foreign markets. Using a difference-in-differences design, we find a decrease in IPO underpricing and an increase in the relative proceeds from foreign markets following mandatory IFRS adoption. We also find that mandatory IFRS adoption has a greater impact on IPO underpricing and relative foreign proceeds for firms in countries with a larger number of accounting changes, and this relation is more pronounced among firms in countries with stronger implementation credibility. In addition, we find that the decrease in underpricing associated with mandatory IFRS adoption holds for both domestic IPOs and global IPOs, and this effect is more pronounced for global IPOs than for domestic IPOs. Overall, our study contributes to the literature by documenting the impact of changes in financial accounting standards on IPO underpricing and capital market globalization.

Effect of the Mandatory Adoption of IFRS on Real and Accruals-based Earnings Management: Empirical Evidence From France

The main purpose of this study is to examine whether the mandatory IFRS adoption within French listed companies provides higher earnings quality. More precisely, we study the impact of mandatory IFRS adoption on two approaches of earnings management: real and accruals-based earnings management. This study focuses on a sample of 1488 firm-year observations, 124 firms drawn from the 250 French-listed companies during the period from 1999 to 2011. We use the panel data for our analysis. Specifically, the FGLS estimator method is conducted in our regression models. Our results indicate that the absolute value of discretionary accruals is significantly reduced six years after the mandatory adoption of IFRS. We also find a negative association between the real earnings management and the mandatory adoption of IFRS. Overall, we can deduce that earnings quality is improved in the post-IFRS period in the French context.

Accounting Conservatism in Europe and the Impact of Mandatory IFRS Adoption: Do Country, Institutional and Legal Differences Survive?

We study the effect of mandatory IFRS adoption in Europe in 2005 on conditional conservatism. We capture conditional conservatism with a modified version of the Khan and Watts (2009) measure (C_Score) that also controls for potential shifts in unconditional conservatism and cost of capital. From a sample of 13,711 firm-year observations drawn from 16 European countries spanning the 2000-2010 period, we document an overall decline in the degree of conditional conservatism after the adoption of IFRS. We show that the decline in conditional conservatism is less pronounced for countries with high quality audit environments and strong enforcement of compliance with accounting standards using the Brown et al. (2014) index. As asset impairment tests are a key mechanism ensuring conditional conservatism in the IFRS framework, we further examine these. We show that firms booking an asset impairment present a smaller decline in the degree of conditional conservatism relative to firms that do not. We also demonstrate that firms that do not book an asset impairment when evidence suggests the probable need to do so experience a more pronounced reduction in conditional conservatism. We argue that IFRS are conceptually conditionally conservative but that inappropriate application of conditional conservatism principles is likely to prevent financial reporting from reaching the level of conservatism targeted by the IASB.

Impact of Mandatory IFRS Adoption on Conditional Conservatism in Europe

We study the effect of the mandatory adoption of IFRS in Europe in 2005 on conditional conservatism. To capture conditional conservatism, we use three measures: the Basu (1997) measure, the Khan and Watts (2009) measure, and a measure controlling for potential shifts in unconditional conservatism and cost of capital after the adoption of IFRS. From a sample of 7,251 firm-year observations drawn from 16 European countries, we document an overall decline of the degree of conditional conservatism across our three measures. While there is no change in weak enforcement/governance countries which remain less conditionally conservative than strong enforcement/governance countries, the latter exhibit a significant decrease. Further, we demonstrate that the decline is more significant for firms carrying intangible assets and goodwill in their balance sheets, items for which impairment tests rely on unverifiable fair value estimates. We argue that IFRS are conceptually conditionally conservative but that inappropriate application of conditional conservatism principles may have prevented financial reporting from reaching the level of conservatism targeted by the IASB.

IFRS Convergence and Adoption: Challenges and Opportunities

“IFRS Convergence and Adoption: Challenges and Opportunities” was the theme of the first JIAR Conference held June 2011 in Xiamen, China. IFRS adoption and convergence is occurring globally. The process of adoption of and conversion to IFRS creates many obstacles as a result of significant differences among countries with respect to institutional, legal, economic, and cultural systems. The conference was organized to identify and examine challenges and opportunities arising from the adoption and implementation of IFRS for practitioners and academicians. The goal of the conference was to deepen understanding and raise awareness of these challenges and opportunities through the sharing of original and rigorous research work to provide practitioners and regulators with deeper insights.The Journal of International Accounting Research (JIAR), published by the International Accounting Session, held its first journal conference in Xiamen, China from June 14 to June 17, 2011. Xiamen University was a cosponsor of the conference. I greatly appreciate Xiamen University; without their substantial support, the conference would not have been a success. Professor Xiaohui Qu and her fellow professors and staff provided excellent logistical support and were very gracious hosts. The staff at the AAA was also extremely helpful.Papers were submitted for one of two tracks: Plenary Session submissions or Concurrent Session submissions. Thirty-four papers were submitted for the plenary sessions, and we received over 60 submissions for the concurrent sessions. It was a very difficult decision to choose only six papers for the plenary sessions and for publication in this special issue. I appreciate the help in reviewing the papers, which were each double-blind reviewed. I also appreciate our committee for all of the work that they did in organizing and putting on such a wonderful conference. The members of the organizing committee were: C. S. Agnes Cheng and Xiaohui Qu (co-chairs), Ervin Black, Greg Burton, Carol Ann Frost, and Stephen Lin.Ultimately, the six papers chosen for the plenary sessions and for publication in this special issue were the right fit for this conference edition and theme. Each of them helps us understand issues relevant to the theme of IFRS convergence and adoption: challenges and opportunities. The authors and discussants provide excellent insight into multiple issues around IFRS convergence and adoption. The authors come from many different countries, including Italy, Russia, Australia, China, Taiwan, Canada, and the U.S.The research in this issue helps us add pieces in the puzzle and cover the following important areas surrounding IFRS adoption: the impact of culture, voluntary and mandatory IFRS adoption, developing and developed countries, as well as corporate governance issues. The first paper in this issue is, “A Cross-Cultural Study of the Influence of Country of Origin, Justice, Power Distance, and Gender on Ethical Decision Making” (Curtis, Conover, and Chui). This paper was chosen purposely because although we are getting closer to having one worldwide accounting standard, we do not have a single harmonized accounting culture. In this study, the authors focus on personal and cultural factors to understand these effects on international accounting and ethical decision making. We learn from their study that while we may achieve a worldwide accounting standard, it is necessary to understand the effects of cultural factors on accountants and their decisions. Greg Burton provides an excellent discussion of this paper and some avenues for future research.In the next three papers, the authors provide insight into IFRS adoption around the world, by a developing country (Nigeria), and within a developed country (Australia). In their paper, “Voluntary IFRS Adoption, Analyst Coverage, and Information Quality: International Evidence,” Kim and Shi provide evidence that firms that voluntarily adopt IFRS have a larger analyst following and that the precision of the information increases. In her discussion, Agnes Cheng provides insight into some of the limitations of this study, noting that, “While Kim and Shi cannot distinguish the causal effects … the evidence that there is an increase in the number of financial analysts following firms that voluntarily adopt IFRS is itself an interesting phenomenon.”Nigeria is the setting for the Bova and Pereira research paper, “The Determinants and Consequences of Heterogeneous IFRS Compliance Levels Following Mandatory IFRS Adoption: Evidence from a Developing Country.” Examining the effects of IFRS adoption in developing countries is an extremely important research area, as many of these countries are seeking to adopt IFRS and compete in the global economy. While limited by data availability, this research finds evidence that IFRS compliance is influenced by economic incentives related to the capital markets. They have interesting data for an emerging economy in which IFRS compliance is made mandatory for all private and public traded firms. They find that public, rather than private firms, exhibit greater IFRS compliance. Also, foreign ownership has a positive impact on IFRS compliance. While recognizing data limitations, the discussant, Stephen Lin, provides some cautions interpreting the results and some excellent suggestions for future research.Chua, Cheong, and Gould examine accounting quality effects of mandatory adoption in a developed country—Australia—in their paper, “The Impact of Mandatory IFRS Adoption on Accounting Quality: Evidence from Australia.” This paper provides evidence of increased accounting quality after mandatory IFRS adoption in Australia. By examining mandatory adoption, the authors are able to remove self-selection bias of research that uses voluntary adopters. The difficulty in this paper lies in the interpretation of the constructs of accounting quality. As the discussant, Nabil Elias, points out: “Is less smoothed earnings or more loss recognition always evidence of improved accounting quality?” Probably not in every circumstance, but given that these have been used as proxies for accounting quality in prior literature, the authors find evidence that earnings smoothing decreases and loss recognition increases after adoption in Australia.In “The Cross-Country Comparability of IFRS Earnings and Book Values: Evidence from France and Germany,” Liao, Sellhorn, and Skaife examine IFRS earnings and book values in two developed countries that have been using IFRS for some years. This is an interesting paper fitting the theme of the conference because the authors find that the comparability of earnings increases after mandatory IFRS adoption in France and Germany. They also find, however, that the increase in comparability decreases in subsequent years after adoption. The discussant, Tony Kang, provides some excellent research design suggestions and also offers some big-picture insights on the journey to global accounting harmonization.In the final paper of this special JIAR issue, “Dominant Owners and Performance of Continental European Firms,” Krivogorsky and Burton examine the association between dominant shareholders and firm performance for firms from seven Continental European countries that have adopted IFRS. The authors examine different dominant ownership types on measures of accounting performance and a measure of firm value. Dominant owners generally have a positive impact. However, as the discussant, Wendy Wilson, points out, “country-level institutions, laws, and other regulatory features can interfere with dominant shareholders' typical incentives and ability to monitor managerial behavior.” Several interesting issues would benefit from future research in this area.Overall, it has been my pleasure to have this opportunity as guest editor of this special JIAR issue. I learned much as I read and reviewed these papers and the discussions provided. The papers provide evidence of the effects of culture that need to be understood as IFRS is adopted globally. Evidence is provided for both voluntary and mandatory IFRS adopters, as well as for developing and developed countries. Ownership and structural factors are also important to understand as we continue to research effects of IFRS adoption internationally.

DISCUSSION OF The Impact of Mandatory IFRS Adoption on Accounting Quality: Evidence from Australia

ABSTRACT Studying the impact of mandatory IFRS adoption on accounting quality in Australia provides a point of reference for comparison to other IFRS-adopting countries. It could also guide the process of transition for countries considering IFRS adoption. Similar to previous research, Chua et al. (2012) use earnings management, early loss recognition, and value relevance to surrogate accounting quality. The study concludes that there is accounting quality improvement as a result of less earnings management, early loss recognition, and increased value relevance. Although the reasons for the results are unexplored, this conclusion, similar to other prior research, is based on disputable interpretations that greater conservatism and lower earnings management reflect higher accounting quality.

The impact of mandatory IFRS adoption on foreign mutual fund ownership: The role of comparability

Proponents of IFRS argue that mandating a uniform set of accounting standards improves financial statement comparability that in turn attracts greater cross-border investment. We test this assertion by examining changes in foreign mutual fund investment in firms following mandatory IFRS adoption in the European Union in 2005. We measure improved comparability as a credible increase in uniformity, defined as a large increase in the number of industry peers using the same accounting standards in countries with credible implementation. Consistent with this assertion, we find that foreign mutual fund ownership increases when mandatory IFRS adoption leads to improved comparability.

Does Mandatory IFRS Adoption Affect Crash Risk?

We examine the impact of mandatory IFRS adoption on firm-level “crash risk,” defined as the frequency of extreme negative stock returns. An important feature of our study is that we separately analyze industrial firms and firms in finance-related industries. This is important because IFRS adoption is likely to affect industrial firms through different mechanisms than financial firms, and as a result may affect crash risk differently. We find that for companies in poor information environments, crash risk decreases among industrial firms and increases among financial firms after the IFRS mandate. We also find that crash risk decreases relatively more among industrial firms where IFRS results in more credible changes to local GAAP, and that crash risk increases relatively more among banks with less restrictive regulations. In addition, we find that earnings volatility declines after IFRS adoption for industrial firms but increases for financial firms. Overall, our findings are consistent with mandatory IFRS adoption decreasing crash risk among industrial firms by improving reporting quality, and increasing crash risk among financial firms by inducing greater volatility and affording more opportunities for manipulation.

The Impact and Importance of Mandatory Adoption of International Financial Reporting Standards in Europe

In this paper we report the results of conducting a two-stage analysis on the impact and importance of mandatory adoption of international accounting reporting standards (IFRS) on European Union firms. In the first stage we determined the impact of mandatory adoption of IFRS across 13 countries and twenty industries. This was accomplished by identifying significant differences in return on assets (ROA) for firms computed under IFRS and local, generally accepted accounting principles (LG). Significant positive differences were detected for firms in Belgium, Finland, France, Italy, the Netherlands, Sweden, Switzerland and the United Kingdom: only German and Norwegian firms exhibited a negative average significant difference between ROA calculated using IFRS and LG. Repeating the analysis of differences in ROA on an industry-by-industry basis yielded additional Portuguese and Spanish firms for the second stage of the analysis in which the impact of mandatory IFRS adoption was assessed. Defining impact in terms of market and financial reporting quality, we found a statistically significant relationship between accounting information and market returns for firms in the all-countries-combined sample of 3,530 observations, and in the countries of Belgium, Finland, France, Greece, Italy, the Netherlands, Norway, Sweden and the United Kingdom. Support for the timeliness of accounting information was uncovered for firms in the all-countries-combined sample, and in the countries of Belgium, Finland, France, Germany, Italy, the Netherlands, Norway, Sweden and Switzerland. Finally, evidence to support the proposition that accounting regimes produce quality discretionary accruals was found for firms from the all-countries-combined sample of 3,480 observations and from Finland, Greece, the Netherlands, Sweden and the United Kingdom. When comparing differential accounting information constructed under IFRS and LG, however, few differences could be found. Specifically, there was no statistical support for any of the samples that accounting information produced under IFRS was any more value relevant than the accounting information derived using LG. When our examination shifted to the timeliness of earnings, a positive differential impact between earnings constructed on the basis of IFRS and local accounting standards was detected only for the all-countries-combined sample. Finally, the quality of discretionary accruals was shown to be significantly higher under IFRS than LG for firms in Finland, Greece and Sweden.

IFRS adoption in Spain and the United Kingdom: Effects on accounting numbers and relevance

Abstract This paper examines the quantitative impact of mandatory IFRS adoption on financial reporting issued by first-time adopters. It analyses whether relevance of financial information is higher under IFRS than the information provided in financial statements prepared under local GAAP when investors have to make decisions in the capital markets. Both studies compare results in Spain and in the United Kingdom, whose accounting systems have been traditionally considered in opposite groups. The results of the research reveal that the quantitative impact is significant in both countries and, against what we expected, it is higher in the United Kingdom. We also observe that IFRS have negative effect on the relevance of financial reporting in both countries, although this effect has only been significant in Spain.

The Impact and Importance of Mandatory Adoption of International Financial Reporting Standards in Europe

In this paper we report the results of conducting a two-stage analysis on the impact and importance of mandatory adoption of International Accounting Reporting Standards (IFRS) on European Union (EU) firms. In the first stage we determined the impact of mandatory adoption of IFRS across fifteen countries and twenty industries in the EU. This was accomplished by identifying significant differences in return on assets (ROA) for firms computed under IFRS and local, generally accepted accounting principles (LG). Significant positive differences were detected for firms in Finland, France, Italy, the Netherlands, Norway, Sweden, Switzerland and the UK: only Belgium firms exhibited a negative average significant difference between ROA calculated using IFRS and LG. Repeating the analysis of differences in ROA on an industry-by-industry basis yielded additional German, Portuguese and Spanish firms for the second stage of the analysis in which the impact of mandatory IFRS adoption was assessed. Defining impact in terms of market and financial reporting quality, we found a statistically significant relationship between IFRS accounting information and market returns for firms in the all-countries combined sample, and in the countries of Belgium, Finland, Germany, Norway and the United Kingdom. Support for the timeliness of IFRS accounting information was uncovered for firms in Belgium, Finland, France, Italy, the Netherlands, Sweden and Switzerland. Finally, evidence to support the proposition that an IFRS regime produces quality discretionary accruals was found for firms from the all-countries-combined sample and from Belgium, Finland, Germany, Norway, Portugal, Spain and the United Kingdom. Results of comparing differential accounting information constructed under IFRS and LG, however, were less profound and consistent. Specifically, we identified firms in the all-countries-combined sample and the countries of Portugal and Spain as having more value relevant earnings per share based on IFRS than those derived using LG. When our examination focused on the timeliness of earnings, a positive differential impact between earnings constructed on the basis of IFRS and local accounting standards was detected for Belgian firms only. Finally, the quality of discretionary accruals was shown to be significantly higher under IFRS than LG for firms in Portugal and Spain.

The Economic Effects of Federal Regulation of the Market for New Security Issues

Previous articleNext article No AccessThe Economic Effects of Federal Regulation of the Market for New Security IssuesGregg A. JarrellGregg A. Jarrell Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by The Journal of Law and Economics Volume 24, Number 3Dec., 1981Consumer Protection Regulation Sponsored by The University of Chicago Booth School of Business and The University of Chicago Law School Article DOIhttps://doi.org/10.1086/467002 Views: 22Total views on this site Citations: 75Citations are reported from Crossref Copyright 1981 The University of ChicagoPDF download Crossref reports the following articles citing this article:OLIVER BINZ, JOHN R. GRAHAM The Information Content of Corporate Earnings: Evidence from the Securities Exchange Act of 1934, Journal of Accounting Research 60, no.44 (Mar 2022): 1379–1418.https://doi.org/10.1111/1475-679X.12425Gregory B. Waymire, Sudipta Basu The Social Value of FASB, Accounting, Economics, and Law: A Convivium 12, no.22 (Feb 2022): 153–180.https://doi.org/10.1515/ael-2021-0001Jinhai Yu Does financial disclosure matter? GASB 45 and municipal borrowing costs, Local Government Studies 48, no.33 (Jan 2021): 534–555.https://doi.org/10.1080/03003930.2020.1870956Donal Byard, Masako Darrough, Jangwon Suh Re-examining the impact of mandatory IFRS adoption on IPO underpricing, Review of Accounting Studies 26, no.44 (Mar 2021): 1344–1389.https://doi.org/10.1007/s11142-020-09576-3Gregory B. Waymire, Sudipta Basu The Social Value of FASB, SSRN Electronic Journal 62 (Jan 2021).https://doi.org/10.2139/ssrn.3889093Brian M. Burnett Do stock prices reflect undisclosed financial statement information? Evidence from the OTCBB, Journal of Accounting and Public Policy 39, no.55 (Sep 2020): 106716.https://doi.org/10.1016/j.jaccpubpol.2020.106716Hans B. Christensen, Lisa Yao Liu, Mark Maffett Proactive financial reporting enforcement and shareholder wealth, Journal of Accounting and Economics 69, no.2-32-3 (Apr 2020): 101267.https://doi.org/10.1016/j.jacceco.2019.101267Katharina Pistor The value of law, Theory and Society 49, no.22 (Mar 2020): 165–186.https://doi.org/10.1007/s11186-020-09388-zJohn H. Wood The Securities Act of 1933, (Jan 2020): 15–61.https://doi.org/10.1007/978-3-030-33083-5_2Oliver Binz, John Robert Graham The Information Content of Corporate Earnings: Evidence from the Securities Exchange Act of 1934, SSRN Electronic Journal 22 (Jan 2020).https://doi.org/10.2139/ssrn.3615644Olena V. Watanabe, Michael J Imhof, Semih Tartaroglu Transparency Regulation and Stock Price Informativeness: Evidence from the European Union's Transparency Directive, Journal of International Accounting Research 18, no.22 (Feb 2019): 89–113.https://doi.org/10.2308/jiar-52383Donal Byard, Masako N. Darrough, Jangwon Suh There is No Evidence that Mandatory IFRS Adoption Significantly Decreased IPO Underpricing, SSRN Electronic Journal (Jan 2019).https://doi.org/10.2139/ssrn.3453254Jonathan Brogaard, Nhan Le, Duc Duy Nguyen, Vathunyoo Sila Does Shareholder Litigation Risk Cause Public Firms to Delist? Evidence From Securities Class Action Lawsuits, SSRN Electronic Journal 98 (Jan 2019).https://doi.org/10.2139/ssrn.3559949Jonathan M. Karpoff, Allison Koester, D. Scott Lee, Gerald S. Martin Proxies and Databases in Financial Misconduct Research, The Accounting Review 92, no.66 (Apr 2017): 129–163.https://doi.org/10.2308/accr-51766Hans Bonde Christensen, Lisa Yao Liu, Mark G. Maffett Proactive Financial Reporting Enforcement and Shareholder Wealth, SSRN Electronic Journal (Jan 2017).https://doi.org/10.2139/ssrn.2843884Hans B. Christensen, Luzi Hail, Christian Leuz Capital-Market Effects of Securities Regulation: Prior Conditions, Implementation, and Enforcement, Review of Financial Studies 29, no.1111 (Jul 2016): 2885–2924.https://doi.org/10.1093/rfs/hhw055Karen K. Nelson, A. C. Pritchard Carrot or Stick? The Shift from Voluntary to Mandatory Disclosure of Risk Factors, Journal of Empirical Legal Studies 13, no.22 (May 2016): 266–297.https://doi.org/10.1111/jels.12115CHRISTIAN LEUZ, PETER D. WYSOCKI The Economics of Disclosure and Financial Reporting Regulation: Evidence and Suggestions for Future Research, Journal of Accounting Research 54, no.22 (Apr 2016): 525–622.https://doi.org/10.1111/1475-679X.12115María-José Palacín-Sánchez, Carmen Pérez-López Los mercados alternativos bursátiles: una perspectiva regulatoria, Cuadernos de Economía 39, no.109109 (Jan 2016): 1–11.https://doi.org/10.1016/j.cesjef.2015.12.003Walaa Wahid ElKelish, Mostafa Kamal Hassan Corporate governance disclosure and share price accuracy, Journal of Applied Accounting Research 16, no.22 (Sep 2015): 265–286.https://doi.org/10.1108/JAAR-02-2013-0015Mattia Cattaneo, Michele Meoli, Silvio Vismara Financial regulation and IPOs: Evidence from the history of the Italian stock market, Journal of Corporate Finance 31 (Apr 2015): 116–131.https://doi.org/10.1016/j.jcorpfin.2015.02.001Stephen A. Zeff Book Reviews, The Accounting Review 90, no.22 (Mar 2015): 819–828.https://doi.org/10.2308/accr-10426Carsten Burhop, David Chambers, Brian R. Cheffins Law, Politics and the Rise and Fall of German Stock Market Development, 1870-1938, SSRN Electronic Journal (Jan 2015).https://doi.org/10.2139/ssrn.2548759EDWARD LEE, NORMAN STRONG, ZHENMEI JUDY ZHU Did Regulation Fair Disclosure, SOX, and Other Analyst Regulations Reduce Security Mispricing?, Journal of Accounting Research 52, no.33 (Apr 2014): 733–774.https://doi.org/10.1111/1475-679X.12051Karen K. Nelson, Adam C. Pritchard Carrot or Stick? The Shift from Voluntary to Mandatory Disclosure of Risk Factors, SSRN Electronic Journal (Jan 2014).https://doi.org/10.2139/ssrn.2447066Mattia Cattaneo, Michele Meoli, Silvio Vismara Financial Regulation and IPOs: Evidence from the History of the Italian Stock Market, SSRN Electronic Journal (Jan 2014).https://doi.org/10.2139/ssrn.2539056Joseph Gerakos, Mark Lang, Mark Maffett Post-listing performance and private sector regulation: The experience of London's Alternative Investment Market, Journal of Accounting and Economics 56, no.2-32-3 (Dec 2013): 189–215.https://doi.org/10.1016/j.jacceco.2013.08.004Kylie Franklin U.S. v. U.K. Insider Trading Laws: Who Is the Top Dog?, SSRN Electronic Journal (Jan 2013).https://doi.org/10.2139/ssrn.2308356Larry Neal, Eugene N. White The Glass–Steagall Act in historical perspective, The Quarterly Review of Economics and Finance 52, no.22 (May 2012): 104–113.https://doi.org/10.1016/j.qref.2011.12.005Manapol Ekkayokkaya, Tulaya Pengniti Governance reform and IPO underpricing, Journal of Corporate Finance 18, no.22 (Apr 2012): 238–253.https://doi.org/10.1016/j.jcorpfin.2011.12.007Carsten Burhop, David Chambers, Brian R. Cheffins Regulating IPOs: Evidence from Going Public in London and Berlin, 1900-1913, SSRN Electronic Journal (Jan 2012).https://doi.org/10.2139/ssrn.1884190Don M. Autore, Irena Hutton, Tunde Kovacs Accelerated Equity Offers and Firm Quality, European Financial Management 17, no.55 (Mar 2011): 835–859.https://doi.org/10.1111/j.1468-036X.2011.00597.xRobert Battalio, Brian Hatch, Tim Loughran Who benefited from the disclosure mandates of the 1964 Securities Acts Amendments?, Journal of Corporate Finance 17, no.44 (Sep 2011): 1047–1063.https://doi.org/10.1016/j.jcorpfin.2011.05.004Joseph J. Gerakos, Mark H. Lang, Mark G. Maffett Listing Choices and Self-Regulation: The Experience of the AIM, SSRN Electronic Journal (Jan 2011).https://doi.org/10.2139/ssrn.1740809Hans Bonde Christensen, Luzi Hail, Christian Leuz Capital-Market Effects of Securities Regulation: Hysteresis, Implementation, and Enforcement, SSRN Electronic Journal (Jan 2011).https://doi.org/10.2139/ssrn.1745105Robert Watson, Jingyun Ma, Fengming Song, Zhishu Yang The dual role of the government: securities market regulation in China 1980‐2007, Journal of Financial Regulation and Compliance 18, no.22 (May 2010): 158–177.https://doi.org/10.1108/13581981011034014Siqi Li Does Mandatory Adoption of International Financial Reporting Standards in the European Union Reduce the Cost of Equity Capital?, The Accounting Review 85, no.22 (Mar 2010): 607–636.https://doi.org/10.2308/accr.2010.85.2.607Nuno Fernandes, Ugur Lel, Darius P. Miller Escape from New York: The market impact of loosening disclosure requirements, Journal of Financial Economics 95, no.22 (Feb 2010): 129–147.https://doi.org/10.1016/j.jfineco.2008.12.010Christian Leuz Different approaches to corporate reporting regulation: How jurisdictions differ and why, Accounting and Business Research 40, no.33 (Jan 2010): 229–256.https://doi.org/10.1080/00014788.2010.9663398Christian Leuz Different Approaches to Corporate Reporting Regulation: How Jurisdictions Differ and Why, SSRN Electronic Journal (Jan 2010).https://doi.org/10.2139/ssrn.1581472G. Sabarinathan Securities and Exchange Board of India and the Regulation of the Indian Securities Market, SSRN Electronic Journal (Jan 2010).https://doi.org/10.2139/ssrn.2145220Manapol Ekkayokkaya, Phil Holmes, Krishna Paudyal Limited Information and the Sustainability of Unlisted-Target Acquirers' Returns, Journal of Business Finance & Accounting 36, no.9-109-10 (Nov 2009): 1201–1227.https://doi.org/10.1111/j.1468-5957.2009.02166.xSiqi Li Does Mandatory Adoption of International Financial Reporting Standards in the European Union Reduce the Cost of Equity Capital?, SSRN Electronic Journal (Jan 2009).https://doi.org/10.2139/ssrn.1113353Don M. Autore, Irena Hutton, Tunde Kovacs Accelerated Equity Offers and Firm Quality, SSRN Electronic Journal (Jan 2009).https://doi.org/10.2139/ssrn.1265148Clifford Winston The Efficacy of Information Policy: A Review of Archon Fung, Mary Graham, and David Weil's Full Disclosure: The Perils and Promise of Transparency, Journal of Economic Literature 46, no.33 (Aug 2008): 704–717.https://doi.org/10.1257/jel.46.3.704Christian Leuz, Peter D. Wysocki Economic Consequences of Financial Reporting and Disclosure Regulation: A Review and Suggestions for Future Research, SSRN Electronic Journal (Jan 2008).https://doi.org/10.2139/ssrn.1105398Christian Leuz Was the Sarbanes–Oxley Act of 2002 really this costly? A discussion of evidence from event returns and going-private decisions, Journal of Accounting and Economics 44, no.1-21-2 (Sep 2007): 146–165.https://doi.org/10.1016/j.jacceco.2007.06.001J. Harold Mulherin Measuring the costs and benefits of regulation: Conceptual issues in securities markets, Journal of Corporate Finance 13, no.2-32-3 (Jun 2007): 421–437.https://doi.org/10.1016/j.jcorpfin.2007.02.005Willem Buijink Evidence-based financial reporting regulation, Abacus 42, no.3-43-4 (Sep 2006): 296–301.https://doi.org/10.1111/j.1467-6281.2006.00202.xM. Greenstone, P. Oyer, A. Vissing-Jorgensen Mandated Disclosure, Stock Returns, and the 1964 Securities Acts Amendments, The Quarterly Journal of Economics 121, no.22 (May 2006): 399–460.https://doi.org/10.1162/qjec.2006.121.2.399Hanno Merkt Das Informationsmodell im Gesellschafts- und Kapitalmarktrecht, Schmalenbachs Zeitschrift für betriebswirtschaftliche Forschung 58, no.S55S55 (Aug 2016): 24–60.https://doi.org/10.1007/BF03372950Frank Partnoy A Revisionist View of Enron and the Sudden Death of ‘May’, (Jan 2006): 54–89.https://doi.org/10.1057/9780230518865_3Paul G. Mahoney, Jianping Mei Mandatory vs. Contractual Disclosure in Securities Markets: Evidence from the 1930s, SSRN Electronic Journal (Jan 2006).https://doi.org/10.2139/ssrn.883706Brian J. Bushee, Christian Leuz Economic consequences of SEC disclosure regulation: evidence from the OTC bulletin board, Journal of Accounting and Economics 39, no.22 (Jun 2005): 233–264.https://doi.org/10.1016/j.jacceco.2004.04.002Udo C. Braendle, Juergen Noll A Fig Leaf for The Naked Corporation, Journal of Management & Governance 9, no.11 (Jan 2005): 79–99.https://doi.org/10.1007/s10997-005-1567-xAsish K. Bhattacharyya, Sadhalaxmi Vivek Rao Economic Impact of 'Regulation on Corporate Governance': Evidence from India, SSRN Electronic Journal (Jan 2005).https://doi.org/10.2139/ssrn.640842Brian J. Bushee, Christian Leuz Economic Consequences of SEC Disclosure Regulation: Evidence from the OTC Bulletin Board, SSRN Electronic Journal (Jan 2004).https://doi.org/10.2139/ssrn.307821Allen Ferrell Mandated Disclosure and Stock Returns: Evidence from the Over-the-Counter Market, SSRN Electronic Journal (Jan 2004).https://doi.org/10.2139/ssrn.500123Udo C. Braendle, Juergen Noll A Fig Leaf for the Naked Corporation?, SSRN Electronic Journal (Jan 2004).https://doi.org/10.2139/ssrn.523102Michael Greenstone, Paul Oyer, Annette Vissing-Jorgensen Mandated Disclosure, Stock Returns, and the 1964 Securities Acts Amendments, SSRN Electronic Journal (Jan 2004).https://doi.org/10.2139/ssrn.597142Paul A. Gompers, Josh Lerner The Really Long-Run Performance of Initial Public Offerings: The Pre-Nasdaq Evidence, The Journal of Finance 58, no.44 (Jul 2003): 1355–1392.https://doi.org/10.1111/1540-6261.00570 Paul G. Mahoney The Origins of the Blue‐Sky Laws: A Test of Competing Hypotheses Mahoney, The Journal of Law and Economics 46, no.11 (Jul 2015): 229–251.https://doi.org/10.1086/345580Peter H. Huang Regulating Irrational Exuberance and Anxiety in Securities Markets, SSRN Electronic Journal (Jan 2003).https://doi.org/10.2139/ssrn.474661J. Mark Ramseyer Corporate Law, (Jan 2017): 503–511.https://doi.org/10.1007/978-1-349-74173-1_97Ajeyo Banerjee, E. Woodrow Eckard Why Regulate Insider Trading? Evidence from the First Great Merger Wave (1897–1903), American Economic Review 91, no.55 (Dec 2001): 1329–1349.https://doi.org/10.1257/aer.91.5.1329LISA M. FAIRCHILD and TIMOTHY W. KOCH THE IMPACT OF STATE DISCLOSURE REQUIREMENTS ON MUNICIPAL YIELDS, National Tax Journal 51, no.44 (Mar 2021): 733–753.https://doi.org/10.1086/NTJ41789365Charles W. Calomiris, Carlos D. Ramirez THE ROLE OF FINANCIAL RELATIONSHIPS IN THE HISTORY OF AMERICAN CORPORATE FINANCE, Journal of Applied Corporate Finance 9, no.22 (Jun 1996): 52–73.https://doi.org/10.1111/j.1745-6622.1996.tb00115.xArie L. Melnik, Steven E. Plaut Disclosure Costs, Regulation, and the Expansion of the Private-Placement Market, Journal of Accounting, Auditing & Finance 10, no.11 (Jul 2016): 23–39.https://doi.org/10.1177/0148558X9501000102John E. Calfee, Janis K. Pappalardo Public Policy Issues in Health Claims for Foods, Journal of Public Policy & Marketing 10, no.11 (Dec 2018): 33–53.https://doi.org/10.1177/074391569101000104David W. Blackwell, David S. Kidwell An investigation of cost differences between public sales and private placements of debt, Journal of Financial Economics 22, no.22 (Dec 1988): 253–278.https://doi.org/10.1016/0304-405X(88)90071-2Robert W. Ingram, Douglas V. DeJong The effect of regulation on local government disclosure practices, Journal of Accounting and Public Policy 6, no.44 (Dec 1987): 245–270.https://doi.org/10.1016/S0278-4254(87)80002-9John C. Hilke Early mandatory disclosure regulations, International Review of Law and Economics 6, no.22 (Dec 1986): 229–239.https://doi.org/10.1016/0144-8188(86)90006-2E. Richard Brownlee, S. David Young Financial disclosure regulation and its critics, Journal of Accounting Education 4, no.11 (Mar 1986): 113–126.https://doi.org/10.1016/0748-5751(86)90027-8Chee W. Chow FINANCIAL DISCLOSURE REGULATION AND INDIRECT ECONOMIC CONSEQUENCES: AN ANALYSIS OF THE SALES DISCLOSURE REQUIREMENT OF THE 1934 SECURITIES AND EXCHANGE ACT, Journal of Business Finance & Accounting 11, no.44 (Dec 1984): 469–483.https://doi.org/10.1111/j.1468-5957.1984.tb00764.x Frank H. Easterbrook , Journal of Political Economy 90, no.66 (Oct 2015): 1300–1303.https://doi.org/10.1086/261124