The Adoption of Internationally Recognized Accounting Standards: Implications for the Credit Markets

• Autores: Joanna Shuang Wu, Xiying Zhang
• Localización: Journal of Accounting Auditing and Finance, ISSN-e 2160-4061, ISSN 0148-558X, Vol. 29, Nº 2, 2014, págs. 95-128
• Idioma: inglés
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• Resumen

  • We examine whether the adoption of internationally recognized accounting standards is associated with a greater sensitivity of credit ratings to accounting information. We find that credit ratings are significantly more sensitive to the accounting default factor post voluntary International Financial Reporting Standards (IFRS)/U.S. Generally Accepted Accounting Principle (GAAP) adoption. Similar evidence is also found post mandatory IFRS adoption in countries with strong rules of law. Collectively, the above evidence suggests that firms� incentives to comply are important in determining the consequences of accounting standard changes.