 |
An International Meeting of American Accounting
Association
|
The effects of international financial reporting standards on the accounts and accounting quality of Australian firms |
Kamran Ahmed
La Trobe University
John Goodwin
School Of Accounting And Law - Rmit University
Abstract: This study examines the effect of Australian equivalents to International Financial Reporting Standards (AIFRS) for 1,387 listed firms over 2004 and 2005. We document and analyse the effects of the most significant changes from AIFRS on earnings and equity and the changes to various financial statement numbers and ratios. We find that AIFRS earnings is higher and equity is lower than AGAAP and more firms have earnings decreases than increases. The effect on ratios is most significant for leverage where the AIFRS ratio is higher. We find little evidence that AIFRS earnings and book value are more value relevant than AGAAP earnings and book value. This result is also found for data partitions of industry sector, firm size and profit and loss-making firms. There is weak evidence of incremental value relevance of AIFRS accounting information.