Title: Convergence of Indian accounting standards to IFRS: impact on quality of financial reporting of Indian industries

Authors: Sushma Vishnani; Saumya Gupta; Hemendra Gupta

Addresses: Jaipuria Institute of Management, Vineet Khand, Gomtinagar, Lucknow, India ' Mahindra & Mahindra Financial Services Limited, Mahindra Tower, Faizabad Road, Indirinagar, Lucknow, India ' Jaipuria Institute of Management, Vineet Khand, Gomtinagar, Lucknow, India

Abstract: This paper assesses whether the mandatory implementation of IndAS (IFRS converged Indian accounting standards) will result in higher financial reporting quality. Particularly, it studies the effect of adopting IndAS by Indian companies on earnings management, earnings persistence, and value relevance of the reported financials. The study contributes to existing body of literature by being a pioneer study for Indian industries, signalling areas of concern for regulators in India and global investors interested in Indian markets. Research findings indicate some improvement in the quality of reported financials after implementation of IndAS. Research output reveals enhancement in market-based measures. However, accounting-based attributes yield mixed findings. While no statistically significant difference is reported by earnings management metrics, the earnings persistence measure shows distinct improvement.

Keywords: earnings quality; earnings management; International Financial Reporting Standards; IFRS; Indian accounting standards; IndAS; financial reporting quality.

DOI: 10.1504/IJMFA.2021.116205

International Journal of Managerial and Financial Accounting, 2021 Vol.13 No.1, pp.1 - 24

Received: 24 Jul 2020
Accepted: 13 Nov 2020
Published online: 13 Jul 2021 *

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