1. UKM Learning and Research Repository
2. PHD Thesis / Tesis PHD
3. Faculty of Economy and Management / Fakulti Ekonomi dan Pengurusan

Title:	International financial reporting standards, financial information quality and investment efficiency :principles versus rules-based standards
Authors:	Rad Seyed Sajad Ebrahimi (P59624)
Supervisor:	Zaini Embong, Dr
Keywords:	Accounting - Standards.
Issue Date:	Jun-2015
Description:	Investment is the ultimate driving force of company value creation and it is one of the important contributors to economic growth. In order to make good investment decisions, relevant and reliable information is vital. Among the required information, the most important is financial information that can facilitate investment decisions. In other words, good quality information may lead to efficient investment. The production of financial information is regulated by financial reporting standards. Hence, the adopted standards may influence the quality of financial information reported by firms. The newly introduced International Financial Reporting Standards (IFRS) is claimed to be of high quality, understandable and enforceable. Consistent with this promulgation, prior studies indicate that the IFRS is more credible and more comprehensive than most local standards, and it has potential to lead to the production of more comparable information. This consequently facilitates decision-making especially regarding investment and hence may be translated into more efficient investment. However, past empirical studies show mixed findings about the impact of IFRS adoption on accounting numbers. For example, some studies find a reduction in earnings management following the IFRS adoption, while similar studies in other countries show the opposite. This indicates that the effect of IFRS adoption could be contingent upon other factors such as financial environment and background of adopting countries. This study therefore investigates the impact of IFRS adoption on financial information quality and investment efficiency incorporating different background of adopting countries. This study adds to the knowledge by comparing the impact of IFRS adoption between rules and principles-based countries. The objectives are empirically evaluated using firm level observations from Malaysia and the Philippines as example of principles-based and rules-based country. The findings indicate that financial information quality and investment efficiency are higher after IFRS adoption. Financial information quality is also found to mediate the relationship between IFRS adoption and investment efficiency. The results also show that the improvement in financial information quality and investment efficiency is stronger in rules-based countries. This indicates that high quality financial information may lead to better investment decisions. The results also suggest that financial information quality can be influenced by financial reporting standards. This implies that the quality of financial information can be institutionalized through standards, and IFRS adoption represents a vehicle through which countries can improve their financial information quality and investment efficiency. Local accounting authorities should therefore play more active role in the interpretation of the standards to ensure that the implementation is in accordance to what is proposed by the standards.,Ph.D
Pages:	251
Call Number:	HF5626.R344 2015
Publisher:	UKM, Bangi
Appears in Collections:	Faculty of Economy and Management / Fakulti Ekonomi dan Pengurusan

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