Investor perceptions of potential IFRS adoption in the United States

P.Y.E. Leung, P.P.M. Joos

Research output: Contribution to journalArticleScientificpeer-review

31 Citations (Scopus)

Abstract

This paper examines the stock market reaction to 15 events relating to IFRS adoption in the United States. The goal is to assess whether investors perceive the switch to IFRS as beneficial or costly. Our findings suggest that investors' reaction to IFRS adoption is more positive in cases where IFRS is expected to lead to convergence benefits. Our results also indicate a less positive market reaction for firms with higher litigation risk, which is consistent with investors' concerns about greater discretion and less implementation guidance under IFRS for these firms. Overall, the findings are relevant to the current debate on IFRS adoption in the U.S. and highlight the importance of convergence to investors.
Original languageEnglish
Pages (from-to)577-609
JournalThe Accounting Review
Volume88
Issue number2
DOIs
Publication statusPublished - 2013

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