Mandatory IFRS Adoption and the Role of Accounting Earnings in CEO Turnover

• 成果类型: Article
• 署名作者: Wu, Joanna Shuang; Zhang, Ivy Xiying
• 署名单位: University of Rochester; University of California System; University of California Riverside
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12428
• 发表日期: 2019
• 页码: 168-197
• 关键词: financial-reporting standards; corporate governance; performance-measures; firm performance; INFORMATION; DIRECTORS; IMPACT

摘要

We study whether mandatory adoption of International Financial Reporting Standards (IFRS) is associated with changes in the sensitivity of CEO turnover to accounting earnings and how the impact of IFRS adoption varies with country-level institutions and firm-level incentives. We find that CEO turnover responds more to a firm's accounting performance after adoption. This increase in turnover-to-earnings sensitivity is concentrated in countries with stronger enforcement of financial reporting and is more prominent for mandatory adopters that have strong firm-level compliance incentives. In addition, we link the change in turnover-to-earnings sensitivity directly to accounting changes due to IFRS adoption and find a stronger adoption effect when firms report large overall accounting changes and large de-recognition of loss provisions upon adoption. Some of the above findings are sensitive to the exclusion of UK firms, which account for more than half of our sample.