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Effect of international financial reporting standards on financial information quality

Author

Listed:
  • Elisa García Jara
  • Amparo Cuadrado Ebrero
  • Rolando Eslava Zapata

Abstract

Purpose - This paper aims to analyze the quality of financial information using financial and economic ratios, assessing if the quality is affected by financial reporting standards. A group of factors that allow proving of the capacity of ratios to measure accounting information quality – and thus facilitating the analysis process to the groups of users – is also determined. Design/methodology/approach - Using a sample of 111 companies from the Madrid Stock Exchange and 32 from Eurostoxx50, descriptive analysis and non‐parametric variance analysis were carried out during the period 2005‐2007. At the same time, reduction data techniques, specifically principal components analysis (PCA), were performed to detect the underlying main factors for the year 2007. Findings - There is an indication that financial information quality is affected by financial reporting standards. Additionally, there is a group of factors that show an alternative to analyze accounting information. Practical implications - This study provides evidence to measure financial information quality and the results can be beneficial to accounting users, as well as contributing to the literature related to this topic. Originality/value - Empirically, this study shows that accounting information is affected by financial reporting standards.

Suggested Citation

  • Elisa García Jara & Amparo Cuadrado Ebrero & Rolando Eslava Zapata, 2011. "Effect of international financial reporting standards on financial information quality," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 9(2), pages 176-196, October.
    • Handle: RePEc:eme:jfrapp:v:9:y:2011:i:2:p:176-196
    DOI: 10.1108/19852511111173121
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    Citations

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    Cited by:

    1. Silviu Cornel Virgil Chiriac, 2021. "The Impact Of Real Estate Investments On The Performance Of The Entities Listed At The Bvb," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 177-186, July.
    2. Lawrence Mpele Lekhanya, 2013. "Functions and Reliability of International Financial Reporting Systems of Rural Smes in Kwazulu Natal: Knowledge and Understanding of Financial Management," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 3(3), pages 125-132, July.
    3. Faisal S. Alanezi & Mishari M. Alfaraih & Eyad A. Alrashaid & Saad S. Albolushi, 2012. "Dual/joint auditors and the level of compliance with international financial reporting standards (IFRS‐required disclosure)," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 28(2), pages 109-129, February.
    4. Kang, Martin & Miller, Andrew & Jang, Kyungmyung & Kim, Horim, 2022. "Firm performance and information security technology intellectual property," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    5. Faisal Alanezi & Mishari Alfraih, 2015. "The Awareness of External Auditors and the Management of Kuwaiti Listed Companies on Determinants of Audit Fees: An Exploratory Study," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(1), pages 108-108, December.

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