Transition to IFRS in Greece: financial statement effects and auditor size

Ioannis Tsalavoutas (Division of Accounting and Finance, The University of Stirling, Stirling, UK)
Lisa Evans (Division of Accounting and Finance, The University of Stirling, Stirling, UK)

Managerial Auditing Journal

ISSN: 0268-6902

Publication date: 7 September 2010



The paper aims to explore the impact of the transition to International Financial Reporting Standards (IFRS) on Greek listed companies' financial statements with a focus on net profit, shareholders' equity, gearing and liquidity. It also seeks to examine any differences in the impact across the sub‐samples of companies with Big 4 and non‐Big 4 auditors.


In line with recent literature, the paper employs Gray's comparability index. The sample consists of 238 Greek companies, representing 75 per cent of the companies listed on the Athens Stock Exchange at the end of March 2006.


Implementation of IFRS had a significant impact on financial position and reported performance as well as on gearing and liquidity ratios. On average, impact on shareholders' equity and net income was positive while impact on gearing and liquidity was negative. Only companies with non‐Big 4 auditors faced significant impact on net profit and liquidity. They also faced a significantly greater impact on gearing than companies with Big 4 auditors. A large number of companies with material negative changes is identified, suggesting that transition to IFRS and the fair value option does not necessarily result in higher shareholders' equity figures. Many companies provided inadequate transitional disclosures. This is significantly related to auditor size.

Practical implications

The findings suggest that reporting quality has improved under the new accounting regime, especially for companies with non‐Big 4 auditors.


Prior literature indicates that the impact revealed in companies' reconciliation statements can have significant effects on users' decision making. On that basis, the study can stimulate future research and is relevant to standard setters and regulators.



Tsalavoutas, I. and Evans, L. (2010), "Transition to IFRS in Greece: financial statement effects and auditor size", Managerial Auditing Journal, Vol. 25 No. 8, pp. 814-842.

Download as .RIS



Emerald Group Publishing Limited

Copyright © 2010, Emerald Group Publishing Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.
To rent this content from Deepdyve, please click the button.