TY - JOUR
T1 - IFRS adoption and analysts' earnings forecasts
T2 - Australian evidence
AU - Cotter, Julie
AU - Tarca, Ann
AU - Wee, Marvin
PY - 2012/6
Y1 - 2012/6
N2 - We study 145 large listed Australian firms to explore the impact of international financial reporting standards (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.
AB - We study 145 large listed Australian firms to explore the impact of international financial reporting standards (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.
KW - AASB 1047 and AASB 101 IFRS transition disclosure
KW - Analysts' forecasts error and dispersion
KW - International financial reporting standards
UR - http://www.scopus.com/inward/record.url?scp=84859939138&partnerID=8YFLogxK
U2 - 10.1111/j.1467-629X.2010.00392.x
DO - 10.1111/j.1467-629X.2010.00392.x
M3 - Article
SN - 0810-5391
VL - 52
SP - 395
EP - 419
JO - Accounting and Finance
JF - Accounting and Finance
IS - 2
ER -