The Adoption of Internationally Recognized Accounting Standards: Implications for the Credit Markets
49 Pages Posted: 25 Jun 2009 Last revised: 22 Sep 2009
Date Written: June 24, 2009
Abstract
We examine whether the adoption of internationally recognized accounting standards is associated with a greater sensitivity of credit ratings to accounting information. Our results suggest that voluntary adoptions of IFRS/U.S.GAAP come with significant increases in the sensitivity of credit ratings to the accounting default factor. No such evidence is found for mandatory adoptions except in countries with stronger rules of law.
Keywords: Internationally recognized accounting standards, IFRS, credit markets, credit relevance
JEL Classification: M41, M44, M47, G33, K20
Suggested Citation: Suggested Citation
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