Title: The impact of IFRS on earnings management: evidence from the People's Republic of China

Authors: Chunhui Liu; Grace O'Farrell

Addresses: Business and Administration, University of Winnipeg, 515 Portage Avenue, Winnipeg MB R3B 2E9, Canada ' Business and Administration, University of Winnipeg, 515 Portage Avenue, Winnipeg MB R3B 2E9, Canada

Abstract: This research investigates how service quality of financial reporting changes with new accounting standards. In particular, the changes to earnings management (EM) due to the adoption of a new set of substantially International Financial Reporting Standards convergent accounting standards in a regulated market, the Peoples Republic of China (China), is examined for the period 2005-2008 with only firms mandated to adopt this new set of standards. The findings indicate that EM through accruals has decreased in China since 2007 under the new set of standards. Implications have immediate benefits for regulators, filers, information consumers, the accounting profession and other stakeholders.

Keywords: services; IAS; International Accounting Standards; EM; earnings management; accounting quality; IFRS; International Financial Reporting Standards; IFRS adoption; P.R. China; research and development; R&D; discretionary accruals; real earnings management; accrual management.

DOI: 10.1504/IJSS.2011.045052

International Journal of Services and Standards, 2011 Vol.7 No.3/4, pp.264 - 277

Published online: 20 Jan 2012 *

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