How the IFRS adoption can be explored by demonstrating the importance of flexibility of accounting standards as a key driver of firms’ earnings management (Smoothing) behavior?

The said study is particularly conducted in order to examine or explores the importance of the flexibility of accounting standards that are considered as the core keys or major drivers of the earning management of the organization. The particular research study also can explore the standards of the IFRS that are the essential part of the accounts and finance.

Question No 2

Hypothesis

H1: The greater flexibility coupled with the lack of clear guidance on how to implement these new standards has led to greater earnings management (smoothing).

H2: Firms’ incentives for transparent reporting provide further support for our claim that difference in the flexibility of different versions.

Both of these hypotheses are developed by considering the all of the determinants major points of the research study. Such as the research study presents mixed evidence on whether the transition to IAS/IFRS deters or contributes to greater earnings management (smoothing).

Question No3
Research Methods

The research study is conducted by using the secondary source of data collection. The quantitative research method is adopted in order to answers the research question of the study. The particular times series data has been used in this study. The population is 29 countries from data are collected to analyze the hypothesis in effective manners. Sample of 3853 firms has been analyzed it means the accurate sample size is 3853. The data is collected and analyzed from 1994 to 2009. This broader sample has been break into three major groups; such as early adopters, late adopters and Mandatory Adopters.

Question No4
Validity of key variables

The validity of the key variables can be identified by considering the major and important variables. All of these variables valid according to its terms and condition because it follows the good conditions of the variables. It analyzes the proper way of analysis and it also defines the good conditions of its particular variables. These variables are defining the good conditions of the relationship of the particular study and variables. It proves that this study is authentic and conducted good results.

Question No5
Findings

The sample consists of 3853 firms from 29 countries (20,278 firm-year observations) that transitioned to IAS/IFRS in the 1994–2007 periods. Early Adopters are firms had a choice between early and late transition and chose to transition to IAS/IFRS in the 1994–2004 periods. Late Adopters are firms that had a choice between early and late transition and chose to transition to IAS/IFRS in the 2005–2009. Mandatory Adopters are firms that had no choice between early and late transition and had to adopt IAS/IFRS between 2005 and 2009.

Question No 6
Strength and limitations

The research study performs the good ways and analysis of the study and it explains and explores the good standards of the accounts and finance. It explores the standards and results of the IFRS in good ways that can be adopted in this study in effective manners.

The study is limited according to its time period because it discusses the data of the few years in the limited time period such as; 1994 to 2009.