Int. J. of Accounting, Auditing and Performance Evaluation   »   2016 Vol.12, No.1



Title: Mandatory IFRS adoption and earnings quality in different institutional settings: a comparison between Italy and the UK


Authors: Domenico Campa; Ray Donnelly


International University of Monaco, 2 Avenue Albert II, 98000 Monaco
Accounting and Finance, University College Cork, Western Road, Cork, Ireland


Abstract: Evidence pertaining to the effect of IFRS adoption on earnings quality in the EU is mixed with results varying by country. Potential reasons for the conflicting results include the diverse institutional settings in which European firms operate as well as methodological issues. We use a sample of firms operating in Italy and in the UK, matched on the basis of size and industry, to examine the relative changes in earnings quality after the mandatory IFRS introduction. Our results refute the suggestion that IFRS are not suitable for code law countries while they accept the evidence that IFRS do not improve earnings quality when it is already at an adequate level.


Keywords: earnings quality; mandatory IFRS adoption; institutional settings; Italy; UK; United Kingdom; firm size; industry sector; code law countries.


DOI: 10.1504/IJAAPE.2016.073886


Int. J. of Accounting, Auditing and Performance Evaluation, 2016 Vol.12, No.1, pp.24 - 44


Available online: 29 Dec 2015



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