TY - JOUR
T1 - IFRS Adoption and Accounting Conservatism of Japanese Firms with Governance System Transition
AU - Shimamoto, Konosuke
AU - Takeda, Fumiko
N1 - Funding Information:
We would like to thank the editor, anonymous reviewer, Dimosthenis Hevas, Victoria Shoaf, Yan-Ting Lin, and other participants at the 85th Conference of the IAES (International Atlantic Economic Society), the 2018 TIJA (The International Journal of Accounting) Symposium, the 2018 AAA (American Accounting Association) Annual Meeting, and the 2018 APMAA (Asia-Pacific Management Accounting Association) Annual Meeting for their helpful comments and suggestions on earlier version of this paper. Fumiko Takeda gratefully acknowledges financial support from Grant-in-Aid for Scientific Research (C) 16 K03734. All remaining errors are our own.
Funding Information:
We would like to thank the editor, anonymous reviewer, Dimosthenis Hevas, Victoria Shoaf, Yan-Ting Lin, and other participants at the 85th Conference of the IAES (International Atlantic Economic Society), the 2018 TIJA (The International Journal of Accounting) Symposium, the 2018 AAA (American Accounting Association) Annual Meeting, and the 2018 APMAA (Asia-Pacific Management Accounting Association) Annual Meeting for their helpful comments and suggestions on earlier version of this paper. Fumiko Takeda gratefully acknowledges financial support from Grant-in-Aid for Scientific Research (C) 16 K03734. All remaining errors are our own.
Publisher Copyright:
© 2020, International Atlantic Economic Society.
PY - 2020/5/1
Y1 - 2020/5/1
N2 - This study examines whether there is a difference in the degree of accounting conservatism between firms that voluntarily adopt International Financial Reporting Standards (IFRS) and those that use local accounting standards in Japan, being a traditional code-law country that is undergoing changes in its governance system. The difference-in-difference approach reveals that the degree of conditional conservatism decreases for IFRS adopters and more sharply for Japanese accounting standards’ users between 2009/2010 and 2018/2019, resulting in relatively larger conditional conservatism for IFRS adopters. The regression analysis shows that the change in conditional conservatism is positively associated with IFRS adopters having a high foreign shareholders ratio. This study makes several contributions to the related literature. First, to the best of our knowledge, this study is the first to provide a comparative analysis of IFRS and Japanese accounting standards with respect to conservatism. Second, additional evidence is provided on the relationship between conservatism and corporate governance.
AB - This study examines whether there is a difference in the degree of accounting conservatism between firms that voluntarily adopt International Financial Reporting Standards (IFRS) and those that use local accounting standards in Japan, being a traditional code-law country that is undergoing changes in its governance system. The difference-in-difference approach reveals that the degree of conditional conservatism decreases for IFRS adopters and more sharply for Japanese accounting standards’ users between 2009/2010 and 2018/2019, resulting in relatively larger conditional conservatism for IFRS adopters. The regression analysis shows that the change in conditional conservatism is positively associated with IFRS adopters having a high foreign shareholders ratio. This study makes several contributions to the related literature. First, to the best of our knowledge, this study is the first to provide a comparative analysis of IFRS and Japanese accounting standards with respect to conservatism. Second, additional evidence is provided on the relationship between conservatism and corporate governance.
KW - Conservatism
KW - Corporate governance
KW - Japan
KW - Voluntary IFRS adoption
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U2 - 10.1007/s11294-020-09788-y
DO - 10.1007/s11294-020-09788-y
M3 - Article
AN - SCOPUS:85086831984
SN - 1083-0898
VL - 26
SP - 161
EP - 173
JO - International Advances in Economic Research
JF - International Advances in Economic Research
IS - 2
ER -