International Accounting Standards and Accounting Quality

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Research Paper No. 1976
International Accounting Standards and Accounting Quality

Mary E. Barth Wayne R. Landsman Mark H. Lang

September 2007

RESEARCH PAPER SERIES

http://ssrn.com/abstract=1029382

International Accounting Standards and Accounting Quality

Mary E. Barth* Graduate School of Business Stanford University Wayne R. Landsman and Mark H. Lang Kenan-Flagler Business School University of North Carolina

September 2007 Forthcoming, Journal of Accounting Research

* Corresponding author: Graduate School of Business, Stanford University, 94305-5015, mbarth@stanford.edu. We appreciate helpful comments from Bill Beaver, Utpal Bhattacharya, Ole-Kristian Hope, Karl Lins, Doug Shackelford, Steve Young, Patricia Walters, T.J. Wong, Ray Ball (editor), an anonymous referee, and workshop participants at the Athens University of Economics and Business, Southern Methodist University, the 2005 Pennsylvania State University Accounting Research Conference, the 2005 Joint Journal of Accounting ResearchLondon Business School Conference on International Financial Reporting Standards, the 2006 New York University International Accounting Convergence and Capital Markets Integration Conference; research assistance of Yang Gui, Yaniv Konchitchki, and Christopher Williams; and funding from the Center for Finance and Accounting Research, Kenan-Flagler Business School.

International Accounting Standards and Accounting Quality

Abstract

We examine whether application of International Accounting Standards is associated with higher accounting quality. The application of IAS reflects the combined effects of features of the financial reporting system, including standards, their interpretation, enforcement, and litigation. We find that firms applying IAS from 21 countries generally evidence less earnings management, more timely loss recognition, and more value…...

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