Jenice Prather-Kinsey

The Value Relevance of Accounting Income Reported By DAX-30 German Companies

International Financial Reporting Standards (IFRS) are required for consolidated financial statements of all European Union (EU) publicly traded companies starting from the December 2005 fiscal year end [Regulation (EC)]; and endorsed by the International Organization of Securities Commission (IOSCO) for its member countries beginning in 2000. We examine the challenges and benefits, including value relevance, of the adoption of IFRS by DAX-30 companies, the German premium stock market. Based on a survey sent to DAX-30 company executives, we find most companies agreeing that implementing IFRS should improve the comparability of financial statements. The complex nature, high cost of adopting and lack of guidance for implementing IFRS, as well as increased volatility of earnings after adopting IFRS, are listed among the most important challenges of conversion to IFRS. We use regression to measure another benefit: the value relevance of book values of earnings and equity in explaining market values of DAX-30 companies during the period 1995-2004. Using 265 observations, we find that adopting IFRS or US Generally Accepted Accounting Principles or cross-listing on the New York Stock Exchange significantly increases the value relevance of earnings relative to market prices.

An analysis of the authorship of international accounting research in U.S. journals and AOS: 1980 through 1996

We analyze the international accounting research published in 30 U.S. academic journals and Accounting Organizations and Society (AOS) from 1980 to 1996 to provide strategies for those interested in pursuing academic careers in international accounting. We focus on the relationship between the most prolific authors and their academic environment. Our findings show that the set of authors and schools of the most prolific authors in international accounting in the U.S. are not the same as the set of the most prolific authors and schools of AOS. Neither the international accounting authors nor their academic affiliations were dominated by U.S. or U.K. academic institutions. The authors in international accounting were promoted within and between schools and many were full professors with professorships. The dominant research methods used and topics researched in AOS were different from those of U.S. journals. Young faculty should develop their career objective and align their employment and publication goals accordingly because they have a broad selection of mentors, universities and journals for which to target their research. Aligning research interests with academic environment choices should maximize an international accounting facultys publication productivity and academic rank.

IAS Versus U.S. GAAP: Assessing the Quality of Financial Reporting in South Africa, the United Kingdom, and the United States

Abstract In this study, we investigate whether financial reporting, using International Accounting Standards (IAS) results in quality disclosures, given differences in institutional and market forces across legal jurisdictions. This study contributes to the global accounting debate by utilizing U.S.-based companies complying with U.S. Generally Accepted Accounting Principles (U.S. GAAP) as a benchmark for measuring the quality of IAS as applied by South Africa (S.A.) and United Kingdom (U.K.) companies. Although South Africa, United Kingdom, and the United States are common law countries with strong investor protection, South Africas institutional factors and market forces vary from that of the U.K. and the U.S. South Africas financial market is less developed than that of the U.K. and the U.S. We compare the discretionary accruals of firms complying with U.S. GAAP to the discretionary accruals of U.K. and S.A. firms complying with IAS. This allows a comparison between companies (S.A. and U.K.) operating under different institutional factors and market forces that have adopted IAS versus U.S. companies that report under U.S. GAAP. Our sample, consisting of U.S., S.A., and U.K. listed firms, contains 3,166 firm-year observations relating to the period 1999–2001. The results of our study indicate that S.A firms utilizing IAS report absolute values of discretionary accruals that are significantly greater than absolute values of discretionary accruals of U.S. firms utilizing U.S. GAAP. In contrast, U.K. firms utilizing IAS report discretionary accruals that are significantly less than the discretionary accruals of companies in the United States reporting under U.S. GAAP. This study contributes to the literature by providing evidence of the quality of financial information prepared under IAS and its dependency on the institutional factors and market forces of a country.