Mandatory Adoption Of IFRS And Earnings Transparency In Korea

Q4 Business, Management and Accounting

Journal of Applied Business Research Pub Date : 2017-10-31 DOI:10.19030/JABR.V33I6.10050

H. Shin, Hyunmin Oh

{"title":"Mandatory Adoption Of IFRS And Earnings Transparency In Korea","authors":"H. Shin, Hyunmin Oh","doi":"10.19030/JABR.V33I6.10050","DOIUrl":null,"url":null,"abstract":"We investigate the relation between mandatory adoption of IFRS (International Financial Reporting Standards) and earnings transparency in Korea. We define transparency of earnings as how well it explains a firm value. Financial reporting mitigates information risks of the firm by lessening information asymmetry between insiders and outsiders of a firm. If accounting information produced after adopting IFRS better explains a firm value, then, it will reduce information asymmetry and information risks of the firm, resulting in enhancement of earnings transparency. We measure earnings transparency based on Barth, Konchitchki, and Landsman et al. (2013) and Cheng and Subramanyam (2008). The sample is 2,276 which are listed on Korea stock exchange over 2008-2014. The empirical result shows adopting IFRS is significantly positive with earnings transparency, which means it mitigates information asymmetry, enhancing earnings transparency in Korea. Our study is distinguished from prior studies because we empirically examine influence of adopting IFRS on earnings transparency of Korea. Our result implies adopting IFRS contributes to higher earnings transparency which helps market participants make decisions.","PeriodicalId":40064,"journal":{"name":"Journal of Applied Business Research","volume":"33 1","pages":"1129"},"PeriodicalIF":0.0000,"publicationDate":"2017-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Applied Business Research","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.19030/JABR.V33I6.10050","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"Business, Management and Accounting","Score":null,"Total":0}

引用次数: 2

Abstract

We investigate the relation between mandatory adoption of IFRS (International Financial Reporting Standards) and earnings transparency in Korea. We define transparency of earnings as how well it explains a firm value. Financial reporting mitigates information risks of the firm by lessening information asymmetry between insiders and outsiders of a firm. If accounting information produced after adopting IFRS better explains a firm value, then, it will reduce information asymmetry and information risks of the firm, resulting in enhancement of earnings transparency. We measure earnings transparency based on Barth, Konchitchki, and Landsman et al. (2013) and Cheng and Subramanyam (2008). The sample is 2,276 which are listed on Korea stock exchange over 2008-2014. The empirical result shows adopting IFRS is significantly positive with earnings transparency, which means it mitigates information asymmetry, enhancing earnings transparency in Korea. Our study is distinguished from prior studies because we empirically examine influence of adopting IFRS on earnings transparency of Korea. Our result implies adopting IFRS contributes to higher earnings transparency which helps market participants make decisions.

查看原文本刊更多论文

韩国强制采用国际财务报告准则与盈余透明度

我们调查了强制性采用IFRS(国际财务报告准则)和韩国盈余透明度之间的关系。我们将盈余的透明度定义为它对公司价值的解释程度。财务报告通过减少公司内部人员和外部人员之间的信息不对称来减轻公司的信息风险。如果采用国际财务报告准则后产生的会计信息能更好地解释企业价值，那么，它将减少企业的信息不对称和信息风险，从而提高盈余透明度。我们基于Barth, Konchitchki, and Landsman et al.(2013)和Cheng and Subramanyam(2008)来衡量收入透明度。样本为2008年至2014年在韩国证券交易所上市的2276家公司。实证结果表明，采用国际财务报告准则与盈余透明度显著正相关，这意味着它缓解了信息不对称，提高了韩国的盈余透明度。我们的研究不同于以往的研究，因为我们实证地考察了采用国际财务报告准则对韩国盈余透明度的影响。我们的结果表明，采用国际财务报告准则有助于提高收益透明度，这有助于市场参与者做出决策。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Journal of Applied Business Research Business, Management and Accounting-Business and International Management

CiteScore

0.60

自引率

0.00%

发文量

期刊介绍： The Journal of Applied Business Research (JABR) welcomes articles in all areas of applied business and economics research. Both theoretical and applied manuscripts will be considered for publication; however, theoretical manuscripts must provide a clear link to important and interesting business and economics applications. Using a wide range of research methods including statistical analysis, analytical work, case studies, field research, and historical analysis, articles examine significant applied business and economics research questions from a broad range of perspectives. The intention of JABR is to publish papers that significantly contribute to these fields.