The key finding from this survey and analysis based on the present evidence relating to the IFRS adoption effects include: Adopting IFRS by the firms in Australia seems to have had positive results for investors alongside analyst on study on disclosing enhanced analysts following, and forecast accuracy. Other studies have reported positive results via the enhancement in the value relevance of the financial reporting following the adoption of the IFRS, and the decline in the firms’ number involving earnings management. The findings of this research have also backed the adoption of the goodwill impairment of IFRS and the deferred taxes regimes as having enhanced quality of accounting (Bond, Govendir and Wells 2016). Other research, nevertheless, have suggested that the quality of accounting have substantially enhanced when weighed against the AGAAP and that initial AGAAP treatment for intangible assets that are identifiable stood increasingly appropriate. The outcome further show that the utilization of IFRS has seen financial reports being longer yet easier to read. Several studies have also reported positive outcome of the comparability promotion among the entities in Australia with respect to the financial reporting practices wither global counterparts. The survey of the literature around the period of IFRS adoption unearthed a degree of pessimism among the listed firms’ managers towards various possible gains from the accounting convergence.
In respect of accounting quality, it is noted that some studies have reported positive results from the shift to goodwill impairment while other studies have shown that alterations to the internally generated intangible assets’ treatment have decreased the Australia financial report quality. The shift to goodwill impairment seems to have additional aftermath provided the obvious rise in the portion of purchase price which companies currentlty allocate to goodwill, compared to additional assets and other studies outcome showing that either pre-or post-IFRS adoption still no proof of a connection of the identifiable assets from the combination of business with the post-acquisition performance.
In regards to readability of financial information, there has been a suggestion that the IFRS use has seen longer and longer reports with ease of reading. These outcome relating to the IFRS influence on the Australian financial reporting quality and practices parallels the conclusion hit by a wider literature scrutiny of the previous empirical study which has consider the IFRS-accounting quality internationally (Bryce, Ali and Mather 2015). The review of the literature has further attributed the mixed outcomes to issues of sampling and the utilization of the diverse quality measures. The issues of sampling has been connected to the fact that many of research have regarded the outcomes of willful adoption of IFRS on the quality. As observed by the Chua and Taylor (2008) alongside McLeay (2011), the firms that adopt IFRs willfully could be unrepresentative of companies and it is challenging hence to control for incentives alongside additional market elements which could have impacts on the quality. In general, 19 papers were identified that examined the IFRS accounting quality for the firms in Australia. It thus remains imperative to recognize that current published studies in Australian setting has taken into account the undergoing going refinement (Benson et al. 2015).
In respect of earnings management, the survey also reviewed the impact of IFRS on earnings management and noted that it has decreased the quantity of firms involving in earnings management. The overall result indicated that distribution of income assessment results reported by 422 firms in Australia showed that earnings management under the IFRS stood aligned with the AGAAP. Also, the earnings management, timely loss recognition and value relevance have been assessed in this review. According to Chua et al. (2012), the comparison was made between the qualities of accounting under IFRS and AGAAP regimes based on three distinct views. The analysis found that IFRS had enhanced the accounting quality of the Australian firms. After the mandatory adoption of the IFRS, the firms in Australia involved in less earnings management by means of smoothing income, better timely loss recognitions as well as enhancement in the value relevance of the information generated by accounting.
In respect of the value relevance of earnings and equity, Chalmer et al. (2011) probed the impact of IFRS adoption on equity and earnings’ value relevance for the ASX listed companies over a timeframe between 1990 and 2008. Specifically, the focus was on the ability of the book value of equity and the earnings reported (NI) to capture info which impact the prices of share. The outcome was that the value relevance of the equity of the shareholder stood consistent crossways the pre-IFRS and the transitions as well as the IFRS era. Such a consistent with the idea that companies were expecting the likely influence of the adoption of IFRS on the choices of accounting (Apergis 2015). It was unearthed that evidence existed of change in transitioning year before adopting the IFRS. Moreover, statistical analysis unearthed that changes in earnings identified stood attached to both large and small industries enterprises and those that reported AGAAP-IFRS variations in either earnings or equity in year 2005. Eventually, it was concluded that earnings persistence surged after the IFRS adoption. Provided this findings, it was concluded by that it meant that earnings, irrespective of the potential for higher volatility under the IFRS, remain more persistent and thus more value-relevant after adoption of the IFRS. Moreover, Godwin et al. (2008) examined the effects of IFRS adoption on value relevance of the quality and earnings using the comparative IFRS and AGAAP outcomes released as portion of the shift to IFRS.
The study found no evidence that IFRS earnings alongside equity remain of higher quality or even more relevant as opposed to those equity and earnings in AGAAP. Such outcomes stood consistent irrespective of the size of the firms, financial performance or industry sector that is profit against loss-making firms. It was thus summarized by the researcher that both equity and earnings adjustment for intangible assets remain adversely linked to price. This implied that shifts to IFRS accounting for intangible remain extremely conservative when weighed against AGAAP. It was further discovered that provisions, impairment and investment adjustments are value relevant but never consistent (Firth and Gounopoulos 2017).
From this survey report, I have been able to shown the relationship between my chosen topic and the international accounting topic of IFRS adoption from my accounting theory and current issues Subject. As has been seen from the discussion, this work has shown the impacts of IFRS on the quality of accounting information. It has been highlighted that it. The outcomes of this survey has shown that a IFRS need to be integrated into the Australian Reporting Framework due to its advantages. In general, there is no substantial evidence demonstrating that adoption of IFRS is needed from the various studies reviewed in this paper. Whereas the analysis if the present Australian evidence supports the view that IFRS has benefited the economy of Australia, it has made realized that this issues needs a further research to give more light on IFRS adoption potential like cost of capital alongside staff mobility. Thus, I have been able to show that IFRS adoption by the firms in Australia seems to have a positive outcome for analysts and investors on the basis of the research showing enhanced analysts following as well as analyst forecasting accuracy together with dispersion.
References
Apergis, N., 2015. The role of IFRS in financial reporting quality: Evidence from a panel of MENA countries. International Journal of Economics and Finance, 7(10), 182.
Benson, K., Clarkson, P. M., Smith, T. and Tutticci, I., 2015. A review of accounting research in the Asia Pacific region. Australian Journal of Management, 40(1), 36-88.
Bond, D., Govendir, B. and Wells, P., 2016. An evaluation of asset impairments by Australian firms and whether they were impacted by AASB 136. Accounting & Finance, 56(1), 259-288.
Bryce, M., Ali, M. J. and Mather, P. R., 2015. Accounting quality in the pre-/post-IFRS adoption periods and the impact on audit committee effectiveness—Evidence from Australia. Pacific-Basin Finance Journal, 35, 163-181.
Bugeja, M. and Loyeung, A., 2015. What drives the allocation of the purchase price to goodwill?. Journal of Contemporary Accounting & Economics, 11(3), pp.245-261.
Bugeja, M. and Loyeung, A., 2017. Accounting for business combinations and takeover premiums: Pre-and post-IFRS. Australian Journal of Management, 42(2), 183-204.
Bugeja, M., Czernkowski, R. and Moran, D., 2015. The impact of the management approach on segment reporting. Journal of Business Finance & Accounting, 42(3-4), 310-366.
Firth, M. and Gounopoulos, D., 2017. IFRS adoption and management earnings forecasts of Australian IPOs
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download