Uniform Accounting Regimes and Managerial Learning from Stock Prices

dc.contributor.author Harré, Simon
dc.contributor.author Novotny-Farkas, Zoltán
dc.contributor.author Renders, Annelies
dc.date.accessioned 2021-11-12T18:39:27Z
dc.date.available 2021-11-12T18:39:27Z
dc.date.issued 2021
dc.description.abstract We investigate whether the introduction of IFRS and associated enforcement changes influence managerial learning from stock prices (proxied by revelatory price efficiency (RPE)), particularly for high-growth firms. The introduction of IFRS creates a more uniform accounting regime across different countries. Uniform accounting regimes reduce the ability of managers of high-growth firms to provide more precise information to investors. This in turn lowers the ability of informed investors to incorporate private information about growth opportunities into the stock price. As a result, managers of high-growth firms learn less from stock prices after the introduction of IFRS. Furthermore, we expect that a strong enforcement enhances this effect, as it improves compliance with IFRS, resulting in even lower precision of financial information for high-growth firms. Our findings are consistent with these predictions.
dc.identifier.uri http://hdl.handle.net/10125/76882
dc.subject IFRS
dc.subject accounting standards
dc.subject financial reporting enforcement
dc.subject managerial learning from stock prices
dc.subject unintended consequences
dc.title Uniform Accounting Regimes and Managerial Learning from Stock Prices
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