The effect of international financial reporting standards adoption on the relation between earnings quality and information asymmetry in Korea

Kwanghee Cho, Kyoung Min Kwon, Han Yi, Yongsuk Yun

Research output: Contribution to journalArticlepeer-review

16 Scopus citations

Abstract

Whereas prior studies provide mixed results on whether the adoption of International Financial Reporting Standards (IFRS) either improves earnings quality or lowers information asymmetry, none examines whether the adoption has indeed altered the assumed negative relation between earnings quality and information asymmetry. Using Korean data with a difference-in-difference design, we address the question by examining whether IFRS adoption has strengthened the assumed negative relation. We fail to document such evidence. This study raises questions regarding the validity of prior studies findings that IFRS adoption has helped capital market participants in Korea via improved earnings quality or lower information asymmetry.

Original languageEnglish
Pages (from-to)95-117
Number of pages23
JournalEmerging Markets Finance and Trade
Volume51
DOIs
StatePublished - 1 May 2015

Keywords

  • accounting quality
  • accounting transparency
  • IFRS
  • information asymmetry
  • Korea

Fingerprint

Dive into the research topics of 'The effect of international financial reporting standards adoption on the relation between earnings quality and information asymmetry in Korea'. Together they form a unique fingerprint.

Cite this