International Accounting Standardization across Countries with Unequal Enforcement- Questionable Benefits at a High Price? Open Access

Abstract

Abstract
International Accounting Standardization across Countries with Unequal Enforcement-
Questionable Benefits at a High Price?
By: Maria Ivanova Vulcheva
This paper examines the potential of global accounting standardization to decrease
the overall reporting quality of the affected jurisdictions because of their ongoing
institutional differences. I hypothesize this might come as a consequence of the cost
related to the transition from one set of accounting standards to another, which is fully
incurred only in the jurisdictions with stronger enforcement and efficient implementation.
I test my hypothesis by comparing firms' delisting decisions in two code-law and two
common-law countries around the introduction of IFRS in the European Union. My
findings indicate that the costs of standardization are sufficient to push some firms out of
the market. However, given a level of incentives the delisting probability is greater for
companies, which operate in common-law jurisdictions. The results suggest that better
awareness of the costs of standardization is needed before it can go any further.

International Accounting Standardization across Countries with Unequal Enforcement-
Questionable Benefits at a High Price?
By
Maria Ivanova Vulcheva
Bachelor of Intl. Economic Relations, University of National and World Economy, 2001
MBA, Emory University, 2005
Advisor: Grace Pownall, Ph.D.
A dissertation submitted to the Faculty of the
James T. Laney School of Graduate Studies of Emory University
in partial fulfillment of the requirements for the degree of Doctor of Philosophy in
Business
2011

Table of Contents

TABLE OF CONTENTS


CONTENT PAGE

I. DISSERTATION
a. Introduction
1
b. Review of literature and hypotheses development
7
i. Chronology of the mandatory adoption of IFRS in the European Union
7
ii. The questionable benefits of mandatory IFRS adoption
9
iii. The costs of IFRS adoption
14
c. Empirical models
20
d. Sample
26
i. Sample selection and data sources
26
ii. Sample description
28
e. Empirical findings
31
i. Listing and delisting trends
31
ii. Incentives and delisting
33
iii. Origin, incentives and delisting
34
f. Additional analysis
36
i. Interaction between IFRS adoption and the firm characteristics included in the
Incentives variable
36
ii. Controlling for voluntary IFRS adopters
37
iii. Alternative enforcement and institutional measures
37
iv. Delisting behavior of companies on London's Main Market and the AIM
38
g. Conclusion and limitations
40
h. References
43
II. TABLES

a. Table 1: Descriptive statistics for the firm characteristics included in the
Incentives variable
50
b. Table 2: Country-level variables
54
c. Table 3: Total number of listed companies, listings, and delistings as a percentage
of beginning-of-the-year total listed shares for Milan, Frankfurt, Dublin, and
London Stock Exchanges
58
d. Table 4: Correlation coefficients for the probability of delisting, incentives, origin
and country-level economic, political, and financial conditions
60
e. Table 5: Effect of incentives on the probability of delisting
61
f. Table 6: Effect of incentives and origin on the delisting probability
63
g. Table 7: Origin and incentive effects including control for voluntary adopters
66
h. Table 8: Companies on the Main and AIM markets - descriptive statistics, listing
trends and migration behavior
68
i. Table 9: Results from probit model of delisting probability on firm incentives
and market listing
72

About this Dissertation

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School	Laney Graduate School
Department	Business
Degree	PhD
Submission	Dissertation
Language	English
Research Field	Business Administration, Accounting
Keyword	IFRS delisting
Committee Chair / Thesis Advisor	Pownall, Grace, Emory University
Committee Members	Waymire, Gregory, Emory University Wang, Xu, Emory University

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