The Journal of International Financial Management & Accounting (JIFMA) for their paper “The Value Relevance of Earnings in Europe: Why do national differences persist?” at the International Association for Accounting Education and Research Conference : World Congress of Accounting Educators and Researchers, (http://congress.iaaer.org/) which took place in Singapore on November 4th-6th, 2010.
The Value Relevance of Earnings in Europe: Why do national differences persist? Andrei FILIP, ESSEC Business School Paris, France
Bernard RAFFOURNIER, University of Geneva, Switzerland.
Since 2005, all European listed companies must comply with IFRS. Several studies have investigated the consequences of this decision, comparing various dimensions of accounting quality before and after IFRS implementation. But none of them really addresses the following question: Will the adoption of a common set of accounting standards result in a standardization of accounting quality throughout Europe, or will national differences persist due to the influence of institutional factors? In order to provide preliminary evidence on this issue, we measure the value relevance of accounting earnings in 14 European countries over the years 2006-2007. The results show that country differences persist despite the use of common accounting standards. Legal and regulatory country characteristics as well as market forces still have a significant impact on the value relevance of accounting data. Our results are also consistent with the idea that legal incentives and market forces can be seen as components of more fundamental cultural dimensions.
Professor Andrei Filip is an assistant professor in the Accounting and Management Control department at ESSEC Business School. Before joining ESSEC Business School, he taught financial accounting in Romania (ASE Bucarest), Switzerland (HEC Genève), and Canada (HEC Montréal). Professor Filip holds a Ph.D. in international accounting from the University of Geneva, and his main research interests are institutional settings and financial reporting quality.
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