Timing Equity Issuance in Response to Information Asymmetry Arising from IFRS Adoption in Australia and Europe

• 成果类型: Article
• 署名作者: Wang, Shiheng; Welker, Michael
• 署名单位: Hong Kong University of Science & Technology; Queens University - Canada
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/j.1475-679X.2010.00392.x
• 发表日期: 2011
• 页码: 257-307
• 关键词: international accounting standards; operating performance; earnings management; FIRMS; UNDERPERFORMANCE; INVESTMENT; decisions; PRIVATE; IMPACT

摘要

This study examines the association between changes in reported financial performance resulting from mandatory adoption of International Financial Reporting Standards (IFRS) and equity issuance during the transition period leading up to IFRS adoption for listed firms in Australia and Europe. We hypothesize that firms affected by the accounting standards change strategically time equity issuance around the time the firm discloses the effects of IFRS adoption on reported financial performance. We document circumstances where market returns are associated with the reconciliation of net income between local GAAP and IFRS. We find that a firm's likelihood of equity issuance and equity issue size during the three years prior to the IFRS reconciliation disclosure are negatively associated with the unexpected change in net income resulting from the conversion to IFRS.