Georgakopoulos, Georgios, Gounopoulos, Dimitrios, Huang, Chen, Patsika, Victoria (2022) The impact of IFRS adoption on IPOs management earnings forecasts in Australia. Journal of International Accounting, Auditing and Taxation, 48 . Article Number 100490. ISSN 1061-9518. (doi:10.1016/j.intaccaudtax.2022.100490) (Access to this publication is currently restricted. You may be able to access a copy if URLs are provided) (KAR id:92638)
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Official URL: https://doi.org/10.1016/j.intaccaudtax.2022.100490 |
Abstract
In this study, we investigate the accuracy of management earnings forecasts under International Financial Reporting Standards (IFRS) in the context of an initial public offering (IPO). We observe a decline in management forecast errors (FEs) in Australia following the mandatory implementation of IFRS in 2005. Further evidence suggests that IPO management earnings forecasts become more conservative in post-IFRS periods. We argue that IFRS enables investors to better evaluate IPO firms’ performance and demand higher returns from firms that report inflated and inaccurate earnings forecasts. We also show that over-optimistic earnings forecasts and larger forecasting errors result in greater underpricing under the IFRS regime. Overall, this study suggests that IFRS, as a set of highquality accounting standards, improved corporate disclosure quality and the information environment.
Item Type: | Article |
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DOI/Identification number: | 10.1016/j.intaccaudtax.2022.100490 |
Uncontrolled keywords: | IFRS, IPOs, information environment, management earnings forecast accuracy, corporate disclosure |
Subjects: | H Social Sciences |
Divisions: | Divisions > Kent Business School - Division > Department of Accounting and Finance |
Depositing User: | Chen Huang |
Date Deposited: | 10 Jan 2022 16:09 UTC |
Last Modified: | 31 Aug 2022 13:32 UTC |
Resource URI: | https://kar.kent.ac.uk/id/eprint/92638 (The current URI for this page, for reference purposes) |
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