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| Author: | DeFond, M. (et al.) |
| Title: | The impact of mandatory IFRS adoption on foreign mutual fund ownership: The role of comparability |
| Journal: | Journal of Accounting & Economics
2011 : APR, VOL. 51:3, p. 240-258 |
| Index terms: | international European Union financial reporting standards accounting standards foreign investment |
| Freeterms: | mutual funds comparability uniformity |
| Language: | eng |
| Abstract: | It is argued by International Financial Reporting Standards (IFRS) proponents that mandating a uniform set of accounting standards improves financial statement comparability, in turn attracting greater cross-border investment. This papers tests this assertion by examining changes in foreign mutual fund investment in firms following mandatory IFRS adoption in the European Union (EU) in 2005. Improved comparability is measured as a credible increase in uniformity, defined as a large increase in the number of industry peers using the same accounting standards. Consistent with this assertion, it is found that foreign mutual fund ownership increases when mandatory IFRS adoption leads to improved comparability. |
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