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Does IFRS increase transparency and consequently increase investor protection?

Title: Does IFRS increase transparency and  consequently increase investor protection?

Term Paper , 2010 , 19 Pages , Grade: 70/100

Autor:in: MSc, BA Christoph Sindezingue (Author)

Business economics - Investment and Finance
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Summary Excerpt Details

Since 2005, the disclosure of consolidated financial statements according to IFRS has been mandatory for all listed companies in the European Union. IFRS supporters claim that a single accounting standard would increase the level of disclosure and hence, increase transparency and therefore investor protection. This paper strives to determine if IFRS increases investor protection through improvements in reporting transparency. Therefore, this paper focuses on the ability of IFRS to decrease earnings management, the main driver of investor protection.

The theoretical rationale gives an overview of earnings management, revealing its popularity among management. However, irrespective of the motivation, earnings management reduces the transparency for the investor and thereby reduces investor protection. The review of empirical evidence reveals that voluntary adoption of IFRS leads to a strong decrease in earnings management and an increase in disclosure quality of financial statements. Indeed, the voluntary adoption is biased because the first-time adopters are convinced that a higher transparency could be used to their own advantage. In contrast, the mandatory adoption is not free of ambiguity, but literature tends to conclude that the forced implementation of IFRS leads neither to a reduction of earnings management nor to a higher level of disclosure. Consequently, a mandatory IFRS adoption does not necessarily increase investor protection.

Excerpt


Inhaltsverzeichnis

  • Executive Summary
  • Introduction
  • Theoretical rationale: Earnings management
    • Techniques and effects
    • Reasons for use of earnings management
  • Empirical Evidence: earnings management and investor protection under IFRS
    • Prior adoption of IFRS
    • Voluntary adoption of IFRS
    • Mandatory adoption of IFRS
  • Summary and conclusion

Zielsetzung und Themenschwerpunkte

Diese Arbeit zielt darauf ab, zu ermitteln, ob IFRS den Anlegerschutz durch verbesserte Transparenz in der Berichterstattung erhöht. Daher konzentriert sich diese Arbeit auf die Fähigkeit von IFRS, das Ergebnismanagement zu verringern, den Haupttreiber des Anlegerschutzes.

  • Analyse der Auswirkungen von IFRS auf die Transparenz der Finanzberichterstattung
  • Beurteilung des Einflusses von IFRS auf das Ergebnismanagement
  • Untersuchung des Zusammenhangs zwischen IFRS und dem Schutz der Anlegerinteressen
  • Bewertung der empirischen Evidenz zur freiwilligen und obligatorischen Einführung von IFRS
  • Identifizierung der Herausforderungen und Chancen bei der Implementierung von IFRS

Zusammenfassung der Kapitel

  • Introduction: Die Einführung beleuchtet die wachsende Bedeutung von IFRS und die Diskussion um die Verbesserung der Transparenz und des Anlegerschutzes.
  • Theoretical rationale: Earnings management: Dieses Kapitel erläutert das Ergebnismanagement als ein zentrales Thema im Kontext von IFRS und analysiert die Techniken und Gründe für dessen Anwendung.
  • Empirical Evidence: earnings management and investor protection under IFRS: Dieses Kapitel befasst sich mit der empirischen Evidenz zum Einfluss von IFRS auf das Ergebnismanagement und den Anlegerschutz. Es werden sowohl freiwillige als auch obligatorische Einführungen von IFRS betrachtet.

Schlüsselwörter

IFRS, Ergebnismanagement, Transparenz, Offenlegung, Anlegerschutz, Forschungsmethoden in Wirtschaft und Finanzen.

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Details

Title
Does IFRS increase transparency and consequently increase investor protection?
College
Durham University  (Durham Business School)
Course
Research Methods
Grade
70/100
Author
MSc, BA Christoph Sindezingue (Author)
Publication Year
2010
Pages
19
Catalog Number
V161689
ISBN (eBook)
9783640769476
ISBN (Book)
9783656089803
Language
German
Tags
IFRS Accouting Investor Transparency Framework IAS Accounting Standards Earnings Management Disclosure Investor Protection Mendatory Adoption of IFRS Voluntary Adoption of IFRS
Product Safety
GRIN Publishing GmbH
Quote paper
MSc, BA Christoph Sindezingue (Author), 2010, Does IFRS increase transparency and consequently increase investor protection?, Munich, GRIN Verlag, https://www.grin.com/document/161689
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