Effect Of the Mandatory Adoption of IFRS On the Quality of Accounting Information: Case of France

ABSTRACT

The main objective of the international IFRS accounting standards is to produce and publish high-quality information that helps in decision-making at the global level. The present study examines the positive impact of the decision of applying the IFRS to the informational quality of published accounting figures. Approaching this informational quality by using asymmetrical information, and validating a model based on a quantitative study conducted by 139 cocmpanies that are listed on the Paris stock exchange for 16 years, our results show that the mandatory adoption of the IFRS has significantly reduced the cost of the capital, which implies that the informational relevance of the accounting figures has improved after the implementation of these standards. Moreover, these results show that when standards are uniform and exogenous to the national institutions, the quality of the financial information is not influenced by legal and political institutions. By also examining the moderating effect of indebtedness, this study shows that the mandatory adoption of the IFRS is more beneficial in most indebted companies.

Keywords: IFRS , Asymmetrical information , Cost of capital , Share prices , Indebtedness.

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Salhi B. Effect Of the Mandatory Adoption of IFRS On the Quality of Accounting Information: Case of France. J Organ Behav Res. 2021;6(2):152-60. https://doi.org/10.51847/F0fNkH8m5k

APA

Salhi, B. (2021). Effect Of the Mandatory Adoption of IFRS On the Quality of Accounting Information: Case of France. Journal Of Organizational Behavior Research, 6(2),152-160. https://doi.org/10.51847/F0fNkH8m5k

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