THE EFFECTS OF IFRS ADOPTION AND ITS ENFORCEMENT ON EARNINGS MANAGEMENT. A STUDY OF THE JOHANESBURG STOCK EXCHANGE

• Main Author: The use of global uniform accounting standards such as Internati, 041514253072
• Format: Theses and Dissertations NonPeerReviewed
• Language: English; English
• Published: 2017
• Subjects: HF5601 Accounting
• Online Access: http://repository.unair.ac.id/64253/1/abstrak.pdf; http://repository.unair.ac.id/64253/2/TESIS.pdf; http://repository.unair.ac.id/64253/
• Institution: Universitas Airlangga

The use of global uniform accounting standards such as International Financial Reporting Standards (IFRS) aims to ensure comparability and transparency of financial statements so as to achieve accounting quality however available literature on the consequences of IFRS on the African market is limited. This study therefore aims to investigate the effects of IFRS adoption on Earnings Management and its Enforcement on the top 100 listed companies on Johannesburg Stock Exchange for the periods 2001-2004 Pre IFRS and 2005-2015 Post IFRS using the Modified Jones Model to detect discretionary accruals. Consistent with previous studies the results indicate that IFRS is significantly correlated with Earnings Management. On contrary to prior studies that suggest that big 4 auditors are an important IFRS enforcement factor this study however does not show a significant relationship between Earnings Management and IFRS Enforcement. As a result this study therefore creates an awareness to countries that have not yet adopted IFRS or are in the convergence process of adopting International Financial Reporting Standard