IFRS adoption and accounting conservatism in Latin America

The purpose of this paper is to analyze the impact of IFRS mandatory adoption on accounting conservatism and to shed light on the drivers of such impact.,Using a sample of listed firms for five Latin American countries, the authors analyze the relation between mandatory adoption of International Financial Reporting Standards and the conditional accounting conservatism of earnings.,The authors find evidence that IFRS adoption boosts earnings conservatism. This result is robust and heterogeneous. The results also show that the effect of IFRS differs across firms and countries. Specifically, the impact of IFRS adoption is higher for low-earnings-quality firms and for firms with high levels of investment opportunities.,The results suggest that IFRS adoption in Latin America has enhanced comparability of financial information both across and within countries.,This paper contributes to the literature by providing new evidence on the drivers of the impacts of IFRS adoption in emerging markets.,Este articulo analiza el impacto de la adopcion obligatoria de las Normas Internacionales de Informacion contable (IFRS o NIIF) en el conservadurismo contable y aclara los determinantes de dicho impacto.,Usamos una muestra de empresas listadas en cinco paises latinoamericanos para analizar la relacion entre la adopcion obligatoria de IFRS y el conservadurismo contable condicional.,Encontramos evidencia de que la adopcion de IFRS aumenta el conservadurismo contable. Este resultado es robusto y heterogeneo. Nuestros resultados tambien muestran que el efecto de IFRS en conservadurismo difiere entre empresas y paises. En particular, el impacto de IFRS es mayor para firmas con baja calidad contable y altos niveles de oportunidades de inversion.,Nuestros resultados sugieren que la adopcion de IFRS en Latinoamerica fomento la comparabilidad de los estados financieros tanto intra como entre paises.,Nuestro estudio contribuye a la literatura proveyendo evidencia nueva sobre los determinantes de los impactos de la adopcion de IFRS en mercados emergentes.