Christos Tzovas

The relevance of IFRS to an emerging market: evidence from Greece

Purpose – This paper aims to examine the relevance of International Financial Reporting Standards (IFRS) in emerging markets, with special reference to the case of Greece.Design/methodology/approach – This paper adopts a mixed methodology relying primarily on secondary sources such as the relevant legislation, published annual reports and reports on the effects of the application of IFRS by Greek firms as well as the results of a postal survey addressed to the finance managers of the top 100 Greek firms. For the postal survey, a modified version of the questionnaire used by Tyrall et al. was adopted.Findings – Although the Greek environment was not appropriate for IFRS application, participants in the survey believe that their adoption improved the quality of financial reporting. The introduction of IFRS increased the reliability, transparency and comparability of the financial statements.Practical implications – This study provides insights regarding the extent to which the introduction of IFRS influence...

An empirical investigation of Greek firms' compliance to IFRS disclosure requirements

This study investigates the compliance of Greek firms to IFRS disclosure requirements. Using a checklist based on the disclosure requirements contained on the proposed standard for SMEs, a compliance score was calculated for a sample of 32 listed and non-listed Greek firms. Subsequently, univariate tests and a multivariate regression model were run to investigate what firm characteristics (listing status, sector, size, profitability) may be related to the extent of compliance. On average, firms comply with about two-thirds of the disclosure requirements. Compliance is positively and significantly influenced by listing status, while the univariate analysis indicated that the larger firms exhibit higher compliance rates. Results are of particular interest to accounting regulators who set disclosure requirements and capital market participants. However, the small size of the sample limits the power of the statistical analysis. The paper empirically investigates the compliance with IFRS requirements and ultimately on the quality of financial statements.

The impact of accounting of securities valuation on stock returns: the case of Greece

Purpose – The purpose of this paper is to investigate the market reaction to the accounting treatment of the marking‐to‐market of equity investments of Greek firms during the period 2002‐2004.Design/methodology/approach – Using data for firms listed in the ASE, a treatment effects model of returns on control variables, the valuation adjustment and a dummy for the accounting treatment which is modeled as conditional to profitability, size and leverage.Findings – It is found that firms chose to take valuation losses through equity but the market considered this treatment as a negative signal. The paper concludes that although market behavior is consistent with the efficient markets hypothesis, managerial behavior is more consistent with the mechanistic hypothesis.Originality/value – This study contributes to understanding the factors that influence the accounting policy decisions of firms listed in the Athens Stock Exchange. In addition, this study contributes to evaluating the IASBs decision to give issue...

DO STOCK PRICES REFLECT REGULATORY REFORMS IN THE CORPORATE GOVERNANCE MECHANISMS? THE CASE OF GREECE

This study provides evidence on the value relevance of corporate governance mechanisms in a developing stock exchange. It empirically investigates the effect of corporate governance mechanisms prescribed by the corporate governance law (L.3016/2002) on abnormal stock returns for firms listed in the Athens Stock Exchange (ASE). The first corporate governance law in Greece aims to improve the existing corporate governance framework. However, stock prices seem no to be affected by the regulatory reforms in the corporate governance mechanisms. Three reasons are given: (1) the fundamental economic value of a firm is not affected by the introduction of corporate governance mechanisms; (2) the fundamental economic value of a firm is affected by the introduction of corporate governance mechanisms but due to the fact that the Greek stock market is not efficient share prices do not reflect firm’s fundamental economic value; and (3) investors may not be convinced that corporate governance mechanisms significantly affect the performance of a company.The findings of this study can facilitate legislators in improving the existing legislation concerning corporate governance and in developing a new one.