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“Accounting quality” Mid Term review February 2009, Valencia. Zoltan Novotny-Farkas (ESR, Frankfurt) Beatriz García Osma (ER, Lancaster) Joao Toniato (ESR, Ljubljana) Yachang Zeng (ESR, Tilburg). Accounting quality.
Zoltan Novotny-Farkas (ESR, Frankfurt)
Beatriz García Osma (ER, Lancaster)
Joao Toniato (ESR, Ljubljana)
Yachang Zeng (ESR, Tilburg)
Accounting quality is a widely used term for certain accounting metrics that are assumed to capture dimensions of accounting quality
Typically, these include earnings management, timeliness, (asymmetric) conservatism, value relevance, predictability
Is there a difference in accounting quality before and after IFRS adoption?
Are changes in accounting quality related to country-level or sector-level legal/institutional/governance factors?
Since 05/2007 INTACCT ESR, Goethe University Frankfurt
Since 5/2007 PhD Studies, Goethe University Frankfurt
01/2006 Diploma in International Business Administration, University of Vienna
PhD supervisor: Günther Gebhardt (Goethe University Frankfurt)
INTACCT supervisors: Günther Gebhardt, Holger Daske (University of Mannheim/Frankfurt)
Excellent research environment
Probably most beautiful campus
Great training workshops
Transfer of knowledge
Research and social community
Main Research Topic: The Effects of IFRS adoption on the loan loss provisioning of banks
Banks play a key role in economy, but due to the peculiarities of the industry banks are most often left out in empirical accounting research
Focus on loan loss provisioning, as it determines significantly the quality of financial statements and the way banks are communicating credit risk
IFRS adoption changes bank accounting significantly – for better or worse?
Assemble a proprietary database on European banks
Analyze the transitional effects on key bank accounting variables
Earnings management pre- versus post IFRS using bankspecific accrual models
IFRS adoption effects vary across European countries
Diversity in the effects are due to different pre-IFRS loan loss provisioning behaviour and differences in bank portfolio characteristics
Existing bank regulatory regimes have an IFRS “overriding” effect
IFRS loan loss provisioning is less conservative and less forward-looking
How do financial statement users perceive the above mentioned changes?
Collaborative projects with ESRs
Beatriz García Osma
2000 BA (Lda) Business Administration, U Autonoma de Madrid
2002 MPhil (DEA) Financial Economics and Accounting, UAM.
2006 PhD Accounting and Finance, Lancaster University
Lecturer in Accounting and Financial Economics, UAM.
INTACCT visits: October-December 2007 (3 months)
October-December 2008 (3 months)
INTACCT Supervisors: Peter F. Pope & Steve Young
INTACCT ER Lancaster:
INTACCT workshops in Tilburg and Valencia.
Weekly research seminars and PhD seminar. Courses on staff development whilst at Lancaster.
Access to best available databases, opportunity to discuss research with INTACCT researchers and faculty.
Weekly meetings and discussions.
Excellent research climate: Lancaster (UK) > 3200mm of rain each year (230 ‘wet’ days/year).
Main research topic: “Earnings quality effects of mandatory IFRS adoption” (coordinator: P.F. Pope, Lancaster).
IFRS increase transparency and comparability (Reg. EC 2002/1606)
Earnings are a key variable for investors and managers (Biddle et al. 1995, Barth et al. 2002, Graham et al. 2005).
Legal, institutional, cultural and political forces have remained local: Can accounting practice be harmonized? (Ball 2006).
Study changes in world-wide accounting quality as measured by earnings management (Leuz et al. 2003, Burghstahler et al. 2006).
IFRS adoption represents significant changes to NI, TA and SE. Overall, ROE (ROA) is 12% (14%) greater under IFRS.
However, countries with the largest regulatory distance to IFRS (e.g., Spain, Greece) show the least significant adjustments.
IFRS transition predicts changes to overall quality post-IFRS.
Evidence suggest uneven implementation and enforcement and heterogenous earnings quality effects.
“A practical guide to using financial statement data from commercial databases” (with P. Alves, W. Beekes & S. Young).
“First-time adoption policy for plant, property and equipment” (with S. Young).
Since 10/2008 INTACCT ESR, University of Ljubljana – Slovenia
Since 10/2006 PhD Studies, University of Lancaster – UK
07/2006 BA (Honours) Accounting and Finance, Manchester Business School – UK
12/2001 BSc Computer Science, Federal University of Espirito Santo – Brazil
PhD Thesis: “Predictability and Pricing of Accounting Information under IFRS”
PhD supervisors: Ken Peasnell and Young-Soo Choi (Lancaster University)
INTACCT supervisor: Aljoša Valentinčič (University of Ljubljana)
PhD and Research Seminars
Great research environment
Workshops / Colloquia
International cooperation with Frankfurt University
Contact with distinguished academics
“Predictability and Pricing of Accounting Information under IFRS” (with Ken Peasnell and Young-Soo Choi)
“Can Analyst Forecast Error Help Explain the Mispricing of Dividends?” (with Aljoša Valentinčič)
Coordination of reporting activities
Conference and seminar attendance
ESR/ER group projects
Finish current projects
Initiate new projects in
collaboration with Frankfurt
Project on write-offs and IFRS
After INTACCT (10/2010) job market
Since Oct 2008 ESR with INTACCT, Tilburg University
Since Oct 2005 PhD in Accounting & Finance, Lancaster University
2004 - 2005 MSc in Accounting & Finance, Lancaster University
2001 - 2004 Senior Accountant (CPA), China.
1997 - 2001 Bachelor in Auditing, Sun Yat-Sen University (China)
PhD Thesis: “Analysts’ ability to detect and disclose low accounting quality”
PhD Supervisor: Steve Young and Daphne Lui (Lancaster University)
INTACCT Supervisor: Willem Buijink and Philips Joos (Tilburg University)
Practical Matters in Settling Down
Interaction in the Host Institution
Responsibilities in the Network
Impact of IFRS on the feasibility of using global firms as comparable firms
Analysts’ ability to detect and disclose low accounting quality
Factors explaining analysts’ disclosure of low accounting quality
Content analysis about the valuation models that analysts used and the source of comparable firms chosen by analysts after the adoption of IFRS
Academic job market