IFRS Adoption among Private Companies: Impact on Earnings Quality

Mara Cameran, Domenico Campa, Angela Pettinicchio, Angela Kate Pettinicchio

Risultato della ricerca: Contributo in rivistaArticolo in rivista

23 Citazioni (Scopus)


EU gave the opportunity to each Member State to oblige/allow non-listed (i.e., private) companies to use international financial reporting standards (IFRS). Considering a sample of Italian private companies that switched to IFRS in the time span from 2005 to 2008, we compare financial reporting quality between IFRS adopters and a matched sample of companies still using local (Italian) generally accepted accounting principles (GAAP). This should be of interest for the EU Commission in evaluating the impact of the current financial reporting regulation and for EU national regulators, who are left with a certain degree of flexibility in endorsing parts of the European legislation. Overall, our results show that IFRS adoption did not improve reporting quality among private companies but, on the contrary, decreased it. As companies can exploit the level of flexibility embedded in IFRS to pursue their own reporting interests, separate analyses were conducted taking into consideration firms’ incentives. In particular, assuming that entities controlled by listed companies might have switched to IFRS mainly for complying with parent company requirements and/or simplifying the financial reporting process, we run the analyses separately for this sub-sample and other firms. Findings reveal signs of earnings quality deterioration for both groups although the impact seems slightly worse for subsidiaries of listed companies
Lingua originaleEnglish
pagine (da-a)278-305
Numero di pagine28
Stato di pubblicazionePubblicato - 2014


  • IFRS
  • private companies
  • reporting incentives
  • reporting quality


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