This study extends previous work which attempted to describe why different managers use different accounting techniques (for financial reporting purposes only). The focus is accounting changes, specifically depreciation changes, both to and from accelerated methods. Seven hypotheses are proposed. Three of them predict a negative relationship between a manager's use of accelerated depreciation and (1) the firm's debt/equity ratio, (2) the existence of a bonus plan based on accounting income and (3) the potential impact of a depreciation change on earnings. These three hypotheses are referred to as H(D/E), H(BONUS) and H(IMPACT), respectively. The other four hypotheses predict a positive relationship between a manager's use of accelerated depreciation and (1) firm size, (2) the degree of voting control exercised by insiders, (3) the strength of current earnings relative to the preceding year's, and (4) industry-wide barriers to entry. These are referred to as H(SIZE), H(CTRL), H(EPS) and H(BTE), respectively. Designating accelerated as A and straight-line as S, the (tax/book) depreciation changes studied are the switch from S/S to A/A in 1954 and the switches from A/A to A/S in 1968 and 1969. All seven hypotheses were jointly tested with respect to the A/A to A/S changes in 1968 and 1969. The 1968 multivariate results indicate varying degrees of support for all the hypotheses except H(BTE), while the 1969 multivariate results support only H(D/E), H(BONUS) and H(SIZE). Only five hypotheses were jointly tested with respect to the change from S/S in 1954 (not H BONUS or H BTE ). Support is offered for H(SIZE), H(D/E) and H(CTRL), but not for H(EPS) or H(IMPACT). Further, the 1954 support is strongest when the 1968/1969 "switchback" firms are excluded from the analysis; that is, when the sample includes only firms which consistently used S as opposed to A for book purposes both before and after 1968-1969. Additional analyses used 1968 data for firms which switched from A/A to A/S in 1969. These "prior year" analyses reveal little new information except to suggest that the D/E ratio of the 1969 "switchers" rose significantly in 1969 from its 1968 level.

This study investigates whether mandatory adoption of International Financial Reporting Standards (IFRS) in Africa has a significant impact on earnings' quality, despite the prevalence of weak country governance. The International Accounting Standards Board (IASB) has identified the use of a common set of high-quality standards- the International financial reporting standards ( IFRS)- to enhance global accounting information quality, and promotes global adoption. However, research opinion on the impact of IFRS compliance, on earnings quality improvement is mixed and unresolved. Furthermore, little is known about the possible impact on earnings in firms located in Africa, where country governance quality is relatively low. Thus, this study targets African countries, and uses data from a general sample of 680 firms covering the period 2000 to 2012, to enrich the impact-of-global-IFRS-adoption debate, with African evidence. The study hypothesises that earnings quality differs between mandatory IFRS and domestic accounting standards(DAS) reporting periods in Africa. The research design involves a range of earnings quality proxies and the use of robust regression models. The study finds that relative to DAS, IFRS based earnings are: more persistent and closely associated with future period cash flows; less managed towards small profits and less smoothed. Also, the study finds more timely loss recognition and an increasing frequency of large losses recognition during periods of mandatory IFRS reporting. The results are robust to various additional tests and offer convincing evidence consistent with the hypotheses. These findings provide some direct evidence that mandatory adoption of IFRS is likely to improve earnings quality in some countries with weak governance. Thus, the study extends the literature on factors that influence earnings quality, and the impact of IFRS in countries with relatively weak governance. The research also informs firms, investors, country-level policy makers; and provides a lead for future investigation.

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Thesis (doctoral)--Universität Hamburg.

Thesis (doctoral)--Universität Erlangen, 1935. / Includes bibliographical references (p. 77-79).

Thesis. / Bibliography: p. 93-98.