Theoretical Background and Capital Market Evidence – A European Perspective
All these issues are of considerable interest for standard setters and policy makers, whose primary aims are in fact to provide investors with useful information for their decision-making process and to allow firms to have access to a more efficient and cost-effective capital market.
15 Preface The IAS/IFRS adoption all over Europe enforced by Regulation 1606/ 2002 represents one of the most important and controversial events in the history of accounting. This research monograph deals with four key issues related to the IAS/ IFRS adoption in Europe. It investigates whether the IAS/IFRS adoption improves financial reporting quality; whether it increases cross-country comparability of financial reporting; whether it lowers the cost of capital for firms; whether fair value accounting effectively contributes to improve finan- cial reporting quality. Recently, the financial crisis has turned the spotlight on fair value accounting and led to a major policy debate on it. Understanding the contribution of IAS/IFRS to financial reporting quality and its usefulness to investors is therefore of great use to standard setters and policy makers. This monograph organizes the research on the effects of the IAS/IFRS adoption in a systematic and comprehensive way so as to contribute to better understand the longstanding debate on the IAS/IFRS usefulness. It also provides the theoretical background within which the proposal of man- dating IAS/IFRS in Europe has been developed. Defining the conceptual framework for the IAS/IFRS implementation is in fact a prerequisite for interpreting research results and for determining whether the European Regulator’s goals have been achieved. As is well known, the purpose of Regulation 1606/2002 is to improve financial reporting transparency, to increase cross-countries comparability and to promote an efficient capital market, that is, a reduction in the cost of capital for firms. This research monograph takes the Regulator’s...
You are not authenticated to view the full text of this chapter or article.
This site requires a subscription or purchase to access the full text of books or journals.
Do you have any questions? Contact us.Or login to access all content.