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The purpose of this paper is to examine empirically the association between the adoption of international accounting standards (IAS/IFRS) and the performance of emerging capital markets.

Data related to 31 developing countries with capital markets were used. The authors performed univariate analyses (means comparison before and after the use of IAS/IFRS), as well as multivariate analyses (estimation of models of panel data), to test the hypothetical relations set up in the paper.

The results suggest that the performance of emerging capital markets is significantly and positively associated with IAS/IFRS use. They are consistent with several empirical investigations which highlighted the relevance of financial information under IAS/IFRS in emerging capital markets.

Several organizations and decision-makers including the IASB, governments, capital markets regulators and international investors should find the policy implications of this paper very meaningful.

To the best of the authors’ knowledge, the relationship between the use of IAS/IFRS and the performance of emerging capital markets based on a group of countries has not yet been explored.

The purpose of this paper is to examine whether the relatively rules-based US Generally Accepted Accounting Principles (GAAP) and the more principles-based International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) provide different opportunities for earnings management (EM). Such an examination is critical as the world moves toward principles-based standards.

Financial information for the fiscal years 1999-2004 from the annual reports of firms listed under the Prime Standard on the Germany Frankfurt Stock Exchange is analyzed. Data from the German Frankfurt Stock Exchange are used to resolve the difficulty in comparing accounting standards across different markets and countries with different institutional factors and corporate governance issues. The unique feature of dual listing in the German Frankfurt Stock Exchange allows firms listing shares under the Prime Standard to report in accordance with either the US GAAP or the IAS/IFRS before the IFRS adoption by the European Union in 2005. Strong legal enforcement in Germany ensures that reporting under each standard is in close compliance to the standard under comparison. Extending extant IFRS vs US GAAP EM research with discretionary accruals, this research contributes to a more comprehensive understanding by also examining EM through deferred tax expense and EM through research and development investment.

The findings reveal that EM through research and development investment is significantly higher for the IAS/IFRS firms. Similar to prior findings, EM through accruals is not found to be significantly different between US GAAP and IAS/IFRS firms.

The findings of this study advance the understanding of differences between US GAAP and IFRS with data from Germany where legal enforcement of standards is strong. In particular, this study reveals that principles-based standards with imprecise rules like IAS/IFRS may encourage structured management due to the expectation of error costs and compliance uncertainty. The results inform regulators considering IAS/IFRS adoption. In addition, this research highlights the importance of considering real EM in US GAAP vs IAS/IFRS studies.

Based on the institutional theory, the purpose of this paper is to examine institutional factors that affect the development of accounting practices in Jordan.

The current study surveys the perceptions of 306 participants and 20 interviewees.

First, the early formation of accounting practices in Jordan has been affected by the legacy of Ottoman Empire’s and the British Colony’s accounting systems. Second, the results indicate that government of Jordan (regulatory frameworks), pressures from international donors and large economic organizations (politico-economic factors), education and training/development (cultural inputs), and the efforts to attract foreign investments and getting access into the international fund and trade (economic factors) have been influential influences in the development of accounting practices and the adoption of International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) in Jordan. Finally, the findings reveal that “Secrecy” construct (a culture input) has been a problematic in the implementation of IAS/IFRS.

The current study provides policy implications for the Jordanian policy makers and for other developing countries that are working hard to improve the quality of financial reporting of their business entities. Finally, the authors suggest some great opportunities for future research.

First, this paper contributes to Jordan’s policy developments including fundamental strategies in terms of attracting foreign investments to expand the economy and the international and regional trade. Second, it fills a gap in the international accounting research by empirically assessing how institutional factors affect the development of accounting practices in emerging country such as Jordan.

The purpose of this paper is to examine the relative value relevance of accounting information arising from the adoption of converged and revised International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) in East Africa.

The research applies “same firm year” design for identification of the effects of changes in accounting standards. A model similar to Ohlson’s price model and random-effects GLS are used to estimate R² of the regressions of share prices on book values and earnings.

The results show that accounting information prepared from revised and converged IAS/IFRS display higher value relevance and also increased following the revision and convergence of IAS/IFRS. The cross-product term is more significant in the post-revision/convergence period thus providing further evidence for increased value relevance after the revision of IAS/IFRS. The results are robust to various models and show that value relevance in East Africa is relatively lower than that of the developed markets.

The current study provides empirical evidence that value relevance increases with converged/revised IAS/IFRS based on quasi natural experimental setting in East Africa. The authors also extend the debate on whether value relevance is relevant in emerging markets, which are regarded as imperfect markets with few regulations, weak enforcement and limited sources of information. The results may be useful to accounting preparers, regulators, investors, standard setters and countries seeking to adopt IAS/IFRS in developing countries.

The purpose of this paper is to analyze the consequences of using international accounting standards (IAS/IFRS) for the development of capital markets located in developing countries (emerging capital markets).

The authors conduct an empirical study using a sample of 38 developing countries with capital markets, starting by comparing the means of the different measures studied before and after the use of IAS/IFRS. A multivariate statistical analysis is conducted based on the estimation of a model of panel data with fixed effects.

The results show that the development of the emerging capital markets is positively and significantly associated with the use of international accounting standards.

The paper's findings are of interest to several different parties, primarily the national accounting standardization body, the IASB, many international organizations and international investors.

The paper describes an empirical study, conducted on a group of developing countries, which provides a better understanding of the potential consequences of the use of IASB standards. The paper is also a meaningful contribution to the international accounting literature, as it examines an interesting subject that has not yet been investigated.

In recent years, Tunisian listed companies have been preparing their financial statements under a hybrid set of accounting standards; a mixture of national and international standards. The purpose of this paper is to empirically verify to what extent this particular form of de facto compliance with IAS/IFRS (which are not authorized in Tunisia) is used among listed companies. The paper further analyzes accounting professionals’ perception of the current state of Tunisian standards and their attitudes in the absence of relevant national Generally Accepted Accounting Principles (GAAPs).

Two methodological approaches were used to answer the paper’s research questions: a document analysis approach and a survey questionnaire.

The document analysis revealed that a growing number of listed companies complement local GAAPs by standards they select among IAS/IFRS. The perception study indicated that Tunisian Accounting Standards are, indeed, less suitable for listed companies’ needs. Accordingly, when there is no local standard to measure a specific transaction or event, accounting professionals seem to have no problem in using some IAS/IFRS as a complement to overcome the unachieved nature of local GAAPs. However, the overall findings are likely to suggest that international standards used must not conflict with the Tunisian conceptual framework’s provisions. This means that the use of IAS/IFRS in conjunction with local GAAPs is generally perceived as being beneficial to the quality of financial statements.

This study may be of interest to many developing countries that have not continued the harmonization of their accounting standards with IAS/IFRS. Future research should focus on the reasons which have led to this unachieved harmonization and the consequences of the normative gap which might emerge.

Previous research has often shown how difficult it is to apply international accounting standards in developing countries, especially when they do not correspond to the companies’ needs. Difficulties could occur when local standard-setters do not accurately know which new international standards are suitable to the market needs. The study gives some insights suggesting that corporate accounting practices should be analyzed to understand the real needs for new standards.

The paper highlights the beginning of a de facto convergence with international accounting standards without any support of national de jure convergence. Consideration of this phenomenon may contribute to the understanding of the malaise that characterizes the current accounting standard-setting in developing countries.

This study aims to investigate in‐depth, and explain the issues related to, the implementation of IAS/IFRS in an emergent country that recently adhered to the European Union, i.e. Romania.

An institutional and structuration theory perspective is used to discuss two stages of IAS/IFRS implementation in Romania. Both primary (11 in‐depth semi‐structured interviews conducted with key actors involved in financial reporting) and secondary data (accounting regulations after the fall of communism, with respect to the implementation of IAS/IFRS) were collected for the purpose of the paper.

It was found that the two stages of IAS/IFRS implementation had different outcomes, with a more profound and qualitative impact of the second phase. The first step was a result of coercive external forces, that is, the influence of the World Bank. Given the lack of other factors to favor the change process, it is argued that the actual implementation of IAS in that period was very limited. Even though the second step meant a reduction in scope to only listed companies in consolidated accounts and financial institutions, it is argued that it was accompanied by a change process more significant than in the previous period.

The paper investigates the inter‐play between institutions, routines and politics in the Romanian context and highlights the complexity of accounting change in an emerging country.

This study aims to validate a direct method to measure relational capital through the estimation of corporate brands. Considering the influence of relational capital management in leading performance and brand development, we consider brand value as a proxy for relational capital. The main research goal is to extend the previous literature on intellectual capital, financial performance and brand management by elaborating and testing an original approach for valuating corporate brands using regression analysis on multiples based on firm-specific accounting data and market information.

The authors propose two econometric models, for both listed and non-listed companies, which consider brand valuations made by primary consulting entities (Interbrand, Brand Finance, BrandZ, European Brand Institute) and multiples derived from accounting and market data of firms. Models were tested on a sample of nonfinancial firms for the period from 2006 to 2019, distinguishing between IAS/IFRS-based and US GAAP-based reporting standards.

The empirical results show that the identified set of market and accounting multiples proved to be significant information for estimating the value of brands within the IAS/IFRS framework, while a lower explanatory power was assessed for US GAAP firms. Furthermore, the empirical evidence confirm that the direct, relative approach based on multiples is more accurate for valuating listed firms than non-listed firms. Robustness analysis demonstrates that findings do not change significantly when the reference datasets and the main assumptions of the models are altered.

The statistical significance of the analysis is limited by the non-objective nature of brand value estimates. The use of additional sources for brand valuations might allow for the further assessment of the robustness of the relationships identified.

Due to their efficacy and ease of use, the proposed models represent valid practical tools for managers, investors, analysts and professional evaluators.

This work contributes to the existing literature through the identification of significant, stable relationships between brand values and the main economic, financial and asset characteristics of firms; the identification of those relationships would allow for the extension of the multiples approach also to the evaluation of brands.

The purpose of this paper is to study the information content of intangible assets under IAS/IFRS when compared to local GAAP for European listed companies.

The paper employs multivariate regression models for a sample of 1,855 European listed firms in a six‐year period, from 2002 to 2004 in local GAAP and from 2005 to 2007 in IAS/IFRS to investigate the empirical relationships between market value of European firms and book value of their intangible assets.

The results suggest that the book value of other intangible assets of European listed firms is higher under IFRS than local GAAP and has more informative value for explaining the price of the share and stock market returns. European investors, however, consider the financial information conveyed by capitalized goodwill to be less relevant under IFRS than with local GAAP. Thus, identified intangible assets capitalized on European company balance sheets provide more value‐relevant information for shareholders than unidentified intangible assets that have been transferred into goodwill, with the exception of Italian and Finnish investors.

The paper adds to the existing literature on IFRS by documenting the association between the market value of European listed firms and the book value of their goodwill and other intangibles assets. The study complements prior studies by demonstrating that country differences persist despite the use of common accounting standards and that legal and regulatory country characteristics as well as market forces could still have a significant impact on the value relevance of accounting data.

The effect of culture, through the accounting values of conservatism and secrecy, on accounting judgments is an area of research extensively studied in developed countries. However, little research has focused on this issue in developing countries, specifically Arab countries. Thus, this study aims to fill this gap by investigating the impact of the combined effect of the culture/accounting dimensions on the interpretation of the probability expressions used in the international accounting standards/international financial reporting standards (IFRSs) in two North African/Arab countries: Tunisia and Egypt.

In the first place, this study determines Hofstede’s cultural index scores for Tunisia, ignored in his original model and updates those related to Egypt, which provides a more relevant understanding of the cultural effect. Then, the study relies on the Hofstede/Gray cultural accounting model to examine the extent to which the accounting values of conservatism and secrecy may affect the recognition of the increase and the decrease of income and the disclosure of this information in the financial statements by postgraduate accounting student in both countries.

The results provide evidence of the generalizability of Gray’s conservatism hypothesis in the North African/Arab countries (i.e. Tunisia and Egypt), at least in the context of income recognition. Moreover, the findings demonstrate that culture, through its influence on the accounting value of secrecy, affects the interpretation of probability expressions used in the IFRSs to establish disclosures.

This study calls for more attention from the standard setters to provide further guidance related to the consistent and accurate numerical value that needs to be assigned to the probability expressions to reduce the ambiguity related to their interpretation. The international accounting standards board (IASB) should pay greater attention to the use of vague probability expressions in developing the IFRSs to promote the true comparability of financial reporting worldwide. Like with any research, this study implies certain limitations specifically related to the sample selection, a sample size, which may affect the generalizability of the results. Thus, future research may rely on a larger sample combining and cover other cultural areas.

The results of this study may give insights into the practical issues faced by the accounting practitioners and which are related to the interpretation and the application of the IFRS including probability expressions. This may trigger their attention toward this issue to reduce the occurrence of these expressions in the revised and newly released standards to guarantee homogeneous financial reporting practices across countries and enhance the IASB’s objective of international accounting harmonization.

This study might be the first one that investigates the issue of the IFRS interpretation in two North African and Arab countries: Tunisia and Egypt. It also provides an original investigation of the cultural effect on accounting judgments based on the actualized Hofstede’s cultural indexes, especially for Tunisia which is ignored in the original country classification.