IFRS adoption and analysts' earnings forecasts: Australian evidence

Cotter, Julie and Tarca, Ann and Wee, Marvin (2012) IFRS adoption and analysts' earnings forecasts: Australian evidence. Accounting and Finance, 52 (2). pp. 395-419. ISSN 0810-5391

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Official URL: http://onlinelibrary.wiley.com/doi/10.1111/j.1467-629X.2010.00392.x/pdf

Identification Number or DOI: doi: 10.1111/j.1467-629X.2010.00392.x

Abstract

We study 145 large listed Australian firms to explore the impact of IFRS adoption on the properties of analysts’ forecasts and the role of firm disclosure about IFRS impact. We find that analyst forecast accuracy improves and there is no significant change in dispersion in the adoption year, suggesting that analysts coped effectively with transition to IFRS. However, we do not observe the expected relationship between firms’ IFRS impact disclosures in their financial statements issued at the end of the transition year with forecast error and dispersion in the adoption year. The results question the timeliness and usefulness of financial statement disclosure, even in a setting where disclosure was mandated by accounting standards (AASB 1047 and AASB 1) and firms had strong incentives to provide information to analysts.

Item Type:	Article (Commonwealth Reporting Category C)
Additional Information:	Article first published online : 24 Nov 2010. Permanent restricted access to published version due to publisher copyright policy.
Uncontrolled Keywords:	International Financial Reporting Standards (IFRS); analysts forecasts error and dispersion; AASB 1047 and AASB 101 IFRS transition disclosure
Fields of Research (FOR2008):	15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150103 Financial Accounting 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150205 Investment and Risk Management 15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150101 Accounting Theory and Standards 15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150104 International Accounting
Subjects:	UNSPECIFIED
Socio-Economic Objective (SEO2008):	B Ecomonic Development > 90 Commercial Services and Tourism > 9099 Other Commercial Services and Tourism > 909999 Commercial Services and Tourism not elsewhere classified B Ecomonic Development > 90 Commercial Services and Tourism > 9001 Financial Services > 900102 Investment Services (excl. Superannuation)
ID Code:	21182
Deposited By:	Prof. Julie Cotter
Deposited On:	27 Apr 2012 17:54
Last Modified:	13 Nov 2012 14:15

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