This study seeks to examine the impact of Australian equivalents to international financial reporting standards (A‐IFRS) on the accounts of small‐, medium‐ and large‐sized firms.
For 135 listed Australian entities, the half‐yearly accounts ended 30 June 2005 are examined to identify the effects of A‐IFRS. Data are gathered on the change in major balance sheet and income statement elements, the major reconciling items and earnings variability.
Findings show that more than half of small firms have no change in net income or equity from A‐IFRS, and that there is an increase in the number of adjustments to net income and equity with firm size. The study also finds that A‐IFRS has increased net income for small‐ and medium‐sized firms. Equity has increased (decreased) under A‐IFRS for small (large) firms. Small firms experience higher earnings variability than medium‐sized or large firms under A‐IFRS.
The sample is limited to 31 December reporting date firms and not all A‐IFRS must be complied with when firms restate their comparatives.
Analysts, auditors and other account users should be aware that the effects of A‐IFRS are correlated with firm size.
This is the first Australian empirical paper on the effects of A‐IFRS. It raises doubts about the contentions of some that A‐IFRS will have widespread adverse effects on firms' accounts.
Goodwin, J. and Ahmed, K. (2006), "The impact of international financial reporting standards: does size matter?", Managerial Auditing Journal, Vol. 21 No. 5, pp. 460-475. https://doi.org/10.1108/02686900610667247Download as .RIS
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