<p>This thesis includes three papers that consider the effects of IFRS adoption on accounting comparability in the European Union (EU). In the first paper, I use actual financial statement data to create a measure of distance (my accounting measure of comparability) from local GAAP to IFRS prior to the adoption of IFRS in 2005. Specifically, I identify 27 accounting items and I examine recognition and disclosure practices of 296 firms listed on Euronext before and after 2005. In contrast to prior work, which conducted such analyses at a de jure level, this de facto level analysis of accounting differences provides evidence about firms' actual reporting choices in their annual reports. This analysis is particularly important when accounting standards (both local GAAPs and IFRS) allow a variety of methods for recognition and disclosure.</p><p>My tests suggest that the change in comparability due to the adoption of IFRS is not uniform. In jurisdictions where local GAAP was more distant from IFRS the increase in comparability was larger than the increase in comparability that occurred in jurisdictions where local GAAP was closer to IFRS prior to IFRS adoption. This result is important because it provides a refined measure that can be used to appraise the actual IFRS effect on various outcome variables.</p><p>In the second study I predict that, if IFRS adoption has led to positive market effects, there would be larger IFRS adoption effects among firms domiciled in countries where local GAAP was further from IFRS prior to 2005 than among firms domiciled in countries where local GAAP was closer to IFRS prior to 2005. I exploit my measure of distance (developed in the first paper) to examine whether firms domiciled in Euronext countries where the distance between local GAAP and IFRS was greater prior to IFRS adoption exhibited larger improvements in the usefulness of their earnings announcements. I measure usefulness as the short-term price and volume reactions to earnings announcements. My analysis proceeds in two steps. First, I confirm an increase in absolute returns and volume reactions, similar to observations in prior research (e.g., Landsman et al., 2011). Second, and more importantly, I find that these increased reactions are not due to IFRS adoption per se, but rather to the inclusion of concurrent information in firms' press releases, most prominently statement of cash flows information. A potential explanation for this result is the regulators' recommendation to expand disclosures in firms' press releases in 2005. I cannot rule out, however, that IFRS had an effect, because the greater consistency in rules and format for the statement of cash flows may have led to an increase in the disclosure of cash flow information in firms' press releases.</p><p>In my third study I expand my sample to all European Union countries and I investigate how cross-border earnings information transfer (my market measure of comparability) changed after IFRS adoption. I explore this effect through two intermediate and complementary effects: accounting uniformity and reporting quality. First, I examine whether an increase in accounting uniformity has led to a greater transfer of market information. Using a sample of firms in the European Union 2001 - 2010, I find support for the presence of a positive change in earnings information transfer after IFRS adoption. Second, I exploit differences across countries in accounting distance and legal enforcement to consider a separate (but related) effect of IFRS on reporting quality. I measure reporting quality as value relevance (the explanatory power of the two summary accounting variables, earnings and book value of equity, in price regressions). I find that IFRS had a positive effect on reporting quality, but only in countries that exhibited strong enforcement and large accounting distance prior to IFRS adoption. In the final test, I partition the countries into groups according to the change in reporting quality after IFRS adoption. I fail to find significant differences in comparability across groupings: the increase in comparability in countries that experienced a positive change in reporting quality is not distinguishable from the change in comparability occurred in countries that did not exhibit an increase in reporting quality around IFRS adoption.</p> / Dissertation

In Canada, many large-scale assessments are administered in English and French. The validity of decisions made from using these assessments critically depends on the meaningfulness and comparability of scores from using different versions of assessments. This research study focused on examining (1) the degree of construct comparability and (2) possible sources of incomparability of the Canadian English and French versions of the programme for international student assessment (PISA), 2003 problem-solving measure (PSM). In this study, statistical and qualitative linguistic reviews were used to examine construct comparability and potential sources of incomparability. These procedures sought to (1) determine the degree of comparability of the measure (2) identify if there are items that function differentially and (3) identify the potential sources of differential item functioning in the two language versions of the measure. Evidence from these procedures was used to determine the comparability of the inferences based on test scores from PISA 2003, PSM. A comparative analysis of the two language versions of the measure indicated that there were some psychometric differences at the scale and item level between the two languages which may jeopardize the comparability of assessment results.

In Canada, many large-scale assessments are administered in English and French. The validity of decisions made from using these assessments critically depends on the meaningfulness and comparability of scores from using different versions of assessments. This research study focused on examining (1) the degree of construct comparability and (2) possible sources of incomparability of the Canadian English and French versions of the programme for international student assessment (PISA), 2003 problem-solving measure (PSM). In this study, statistical and qualitative linguistic reviews were used to examine construct comparability and potential sources of incomparability. These procedures sought to (1) determine the degree of comparability of the measure (2) identify if there are items that function differentially and (3) identify the potential sources of differential item functioning in the two language versions of the measure. Evidence from these procedures was used to determine the comparability of the inferences based on test scores from PISA 2003, PSM. A comparative analysis of the two language versions of the measure indicated that there were some psychometric differences at the scale and item level between the two languages which may jeopardize the comparability of assessment results.

In Canada, many large-scale assessments are administered in English and French. The validity of decisions made from using these assessments critically depends on the meaningfulness and comparability of scores from using different versions of assessments. This research study focused on examining (1) the degree of construct comparability and (2) possible sources of incomparability of the Canadian English and French versions of the programme for international student assessment (PISA), 2003 problem-solving measure (PSM). In this study, statistical and qualitative linguistic reviews were used to examine construct comparability and potential sources of incomparability. These procedures sought to (1) determine the degree of comparability of the measure (2) identify if there are items that function differentially and (3) identify the potential sources of differential item functioning in the two language versions of the measure. Evidence from these procedures was used to determine the comparability of the inferences based on test scores from PISA 2003, PSM. A comparative analysis of the two language versions of the measure indicated that there were some psychometric differences at the scale and item level between the two languages which may jeopardize the comparability of assessment results.

In Canada, many large-scale assessments are administered in English and French. The validity of decisions made from using these assessments critically depends on the meaningfulness and comparability of scores from using different versions of assessments. This research study focused on examining (1) the degree of construct comparability and (2) possible sources of incomparability of the Canadian English and French versions of the programme for international student assessment (PISA), 2003 problem-solving measure (PSM). In this study, statistical and qualitative linguistic reviews were used to examine construct comparability and potential sources of incomparability. These procedures sought to (1) determine the degree of comparability of the measure (2) identify if there are items that function differentially and (3) identify the potential sources of differential item functioning in the two language versions of the measure. Evidence from these procedures was used to determine the comparability of the inferences based on test scores from PISA 2003, PSM. A comparative analysis of the two language versions of the measure indicated that there were some psychometric differences at the scale and item level between the two languages which may jeopardize the comparability of assessment results. / Education, Faculty of / Educational and Counselling Psychology, and Special Education (ECPS), Department of / Graduate

Les deux études menées dans cette thèse portent sur les questions de recherche liées aux objectifs des normes comptables internationales les plus importants : la comparabilité, la transparence et la qualité de l'information comptable. La première étude étudie la comparabilité de l'information comptable en ce qui concerne le secret et la divergence avant l'adoption. Dans cette étude, on prétend qu'il est facile de prévoir si l'adoption des IFRS améliore la réaction du marché des concurrents autour des annonces de revenus d'une entreprise donnée. Les résultats suivants ont été documentés, des preuves ont été fournies, ce qui démontre que le transfert d'informations aux annonces de bénéfices augmente suite à l'adoption obligatoire des IFRS, ce qui suggère en moyenne une comparabilité de l'information comptable (ci-après, la comparabilité). Cependant, lors d'enquêtes plus approfondies, il semble que la comparabilité augmente pour les entreprises domiciliées dans des pays caractérisés par un faible secret (c.-à-d. où la transparence domine) et, plus étonnamment, par un faible niveau de divergence (c'est-à-dire une faible distance comptable) de la norme IFRS avant l'adoption des IFRS. Par conséquent, ces résultats suggèrent que toutes les entreprises n'appliquent pas les IFRS de manière identique et qu'elles ne respectent pas entièrement ou systématiquement les IFRS. La deuxième étude porte sur la transparence des bénéfices en examinant la relation entre les gains et les rendements en matière d'application et de conservatisme. Dans cette étude, nous examinons les effets de l'application et du conservatisme sur la transparence des bénéfices en vertu des IFRS. Les résultats suivants ont été documentés, des éléments de preuve ont été fournis, ce qui démontre que la transparence des bénéfices augmente pour les entreprises domiciliées dans des pays caractérisés par une forte application seulement, alors qu'il n'y a pas d'avantages en matière de transparence des bénéfices suite à l'adoption des IFRS pour les entreprises domiciliées dans des pays caractérisés par un niveau élevé du conservatisme. Cela suggère que les IFRS ne sont pas appliquées de la même manière dans tous les pays. / Despite the importance of the IFRS in the international context of financial reporting accounting, we know very little concerning the effects of culture on the application of the IFRS. This dissertation empirically examines whether accounting information comparability and earnings transparency resulting from the IFRS adoption varies depending on cultural and institutional factors. Thus, the discussion considers, whether cultural and institutional factors can provide an explanation for differences in accounting information comparability and earnings transparency under the IFRS. Accordingly, the primary purpose of this dissertation is to investigate the role of secrecy, conservatism, pre-adoption divergence between IFRS and national GAAP, and enforcement on accounting information comparability and earnings transparency following the mandatory IFRS adoption.This dissertation therefore contributes to the accounting literature by presenting two essays. The essays address the research questions related to the goals of the IFRS in relation to two aspects: accounting information comparability and earnings transparency. The first study investigates comparability with regard to secrecy and pre-adoption divergence between IFRS and national GAAP. In this study, it is argued that it is easy to predict whether the IFRS adoption enhances the market reaction of competitors around the earnings announcements of a given firm. The results were documented evidence demonstrating that information transfer at earnings announcements increases following the mandatory adoption of IFRS, suggesting, on average, a high level of comparability. However, following the investigations, it would appear that comparability increases for firms domiciled in countries with a low level of secrecy (i.e., where transparency dominates) and, where there is a low divergence of accounting distance. Consequently, these results suggest that all firms do not apply the IFRS uniformly and that they do not automatically comply with IFRS. The second study investigates earnings transparency by examining the earnings-returns relationship with regard to enforcement and conservatism. In this study, the effects of enforcement and conservatism on earnings transparency were examined following the mandatory adoption of IFRS. The results were documented, which demonstrate that earnings transparency increases for firms domiciled in countries characterized by low conservatism only (i.e., where optimism dominates) and, there are benefits with regard to earnings transparency following IFRS adoption for firms domiciled in countries characterized by a high level of enforcement. This also suggests that IFRS is not being applied in the same way in all countries. Taken together, there are significant cross-country differences in IFRS compliance. Accordingly, comparability and transparency differ depending on where a firm is domiciled. If the firms are domiciled in a supportive environment in terms of applying the IFRS (i.e., where there is transparency, optimism, low divergence of accounting distance and strong enforcement), the level of comparability and transparency are increased.

This dissertation reports a study into the appropriateness of on-screen assessment materials compared to paper-based versions, and how any potential change in assessment modes might affect assessment practices in schools. The research was centred around a controlled comparative trial of paper and on-screen assessments with 1000 school students. The appropriateness of the assessments was conceptualised in terms of exploring the comparative reliability, validity and scoring equivalence of these assessments in paper and on-screen modes. Reliability was considered using quantitative analysis: calculating the performance and internal reliability of the assessments using classical test theory, Cronbach’s alpha and Rasch latent trait modelling. Equivalence was also addressed empirically. Marking reliability was not quantified, however it is discussed. Validity was considered through qualitative analysis, using questionnaire and interview data obtained from the students and teachers participating in the trial; the focus on the comparative authenticity and fitness for purpose in assessments in different modes. The outcomes of the research can be summarised as follows: the assessment tests in both modes scored highly in terms of internal reliability, however they were not necessarily measuring the same constructs. The scores from different modes were not equivalent, with students performing better on paper. The on-screen versions were considered to have greater validity by students and teachers. All items in the assessments that resulted in significant differences in performance were analysed and categorised in terms of item types. Consideration is then given to whether differences in performance are the result of construct irrelevant or relevant factors. The recommendations from this research focus on three main areas; that in order for on-screen assessments to be used in schools and utilise their considerable potential, the equivalence issue needs to be removed, the construct irrelevant factors need to be clearly identified and minimised and the construct relevant factors need to be enhanced. Finally a model of comparative modal dependability is offered, which can be used to contrast and compare the potential benefits and issues when changing assessment modes or item types are considered.

Ainda existem muitas controvérsias práticas e acadêmicas sobre o modo adequado de se regular a contabilidade (Cole et al., 2012). Por um lado, autores como Sunder (2009), Schipper (2003) e d\'Arcy (2000) defendem que os padrões mais flexíveis (aqueles baseados em princípios) aumentam a variabilidade do produto final dos relatórios financeiros e como consequência diminuem a sua comparabilidade. Agoglia et al. (2011) e Collins et al. (2012), por outro lado, encontraram evidências empíricas exatamente do contrário, ou seja, os padrões baseados em princípios geraram resultados menos discrepantes, o que poderia sugerir uma maior comparabilidade dos relatórios financeiros. Nesta pesquisa, o objetivo foi avaliar diretamente o impacto de um movimento de flexibilização regulatória contábil sobre a comparabilidade dos relatórios financeiros. O país escolhido para análise foi o Brasil, pois ele foi um dos poucos países no mundo em que houve um processo radical de mudança regulatória de um padrão totalmente baseado em regras com forte vinculo com a contabilidade fiscal (Lopes, 2011) para um padrão baseado em princípios com maior necessidade de julgamento por parte dos gestores que elaboram os relatórios financeiros. Para medir a comparabilidade foi utilizado o modelo de similaridade da função contábil desenvolvido por DeFranco et al. (2011) e outras medidas alternativas para análise de sensibilidade. Para medir o impacto da flexibilização regulatória foram utilizados dois modelos. O primeiro modelo separou o período de transição por ano e comparou os resultados obtidos nos anos 2006 a 2012 individualmente com o período de referência 2004 e 2005. O segundo modelo separou o antes e o depois do impacto da adoção das normas internacionais que ocorreu em 2010. As companhias analisadas foram todas as de capital aberto que apresentaram dados completos para o período analisado e possuíam, no mínimo, uma companhia par dentro do mesmo setor de atividades econômicas. Os resultados obtidos comprovam que, na média, não houve uma diminuição significativa do nível de comparabilidade within-country durante o período de transição regulatória nem com o impacto da adoção do padrão IFRS no Brasil. Pelo contrário, houve um aumento da comparabilidade genuína com a adoção do padrão internacional no Brasil para as companhias analisadas nesta pesquisa. Para as medidas alternativas de comparabilidade, a uniformidade de movimentação do lucro (covariação) foi a única que apresentou variação negativa significativa durante o período de transição. Isto reforça o resultado da pesquisa e mostra que enquanto houve uma diminuição no nível de uniformidade dos relatórios financeiros a comparabilidade não diminuiu, contrariamente, aumentou. A principal conclusão deste trabalho é que aumentar o poder discricionário do gestor por meio da flexibilização dos padrões contábeis não diminui a comparabilidade dos relatórios financeiros. / There are still many practical and academic controversies about the proper way to regulate accounting (Cole et al., 2012). On the one hand, authors like Sunder (2009), Schipper (2003) and d\'Arcy (2000) argue that more flexibility allowed in standards (those based on principles) increases the variability of the end product of financial reporting and as a consequence their comparability is reduced. Agoglia et al. (2011) and Collins et al. (2012), on the other hand, found empirical evidences showing exactly the opposite, standards based on principles generated less variability in accounting outcomes, which could suggest a greater comparability of financial reporting. In this research, the objective was to directly assess the impact of a movement in accounting regulatory easing on the comparability of financial reporting . The country chosen for analysis was Brazil because it was one of the few countries in the world where there has been a radical process of regulatory change of a fully rule-based with a strong bond with the tax accounting (Lopes, 2011) for a standard based on principles with greatest need of judment for managers who prepare financial reports. To measure the level of comparability in financial reports this research choosed the model similarity of accounting function developed by DeFranco et al. (2011). To measure the impact of regulatory flexibility two approaches were used. The first approach separated the transition period by year and compared the results obtained in the years 2006 - 2012 with the reference period of 2004 and 2005. The second approach separated the adoption of IFRS in Brazil in two periods, before and after 2010. The companies surveyed were all public corporations with stocks traded in brazilian\'s stock market that had complete data and had at least one pair within the same company sector of economic activities. The results shows that, on average for the companies analysed in this research, there was no significant decrease in the level of within-country comparability during the regulatory transition in Brazil. They also show that impact of adopting IFRS was positive rather than negative. This fact proves that there was na increase in genuine accounting comparability with the adoption of international standard in Brazil for the companies analyzed in this research. For the alternative measures of comparability, the earnings co-movement was the only one that showed a significant negative change during the transition period. This reinforces the results of this work and shows that while there was a decrease in the level of uniformity of financial reporting, the genuine comparability has not decreased, in contrast, it rose. The main conclusion of this work is: the increase in the discretion of the manager through the flexibility of accounting standards does not reduce the comparability of financial reporting .

Comparability is a central feature of financial reporting systems. Comparability is defined by FASB (2010, 19) as “the qualitative characteristic that enables users to identify and understand similarities in, and differences among, items.” The Accounting Principles Board ranked comparability as one of the most important objectives of financial reporting and Generally Accepted Accounting Principles have underscored the importance of comparability for the past four decades. Using empirical measures of financial statement comparability, studies confirm that comparability plays an important role in analyst following, audit fees, credit risk, acquisition decisions, stock price volatility, the cost of debt, the cost of equity, and cash holdings. This dissertation, investigates the impact of comparability on trade credit, earnings management through classification shifting, and on non-Big4 auditors. Prior studies find that comparable firms enjoy a lower cost of equity capital and a lower cost of debt. They should, therefore, require less trade credit. I also find that comparable smaller and/or financially distressed firms require less trade credit whereas they normally require higher levels of trade credit. The results presented in my first essay support this hypothesis in that comparability and trade credit are significantly negatively associated. The results presented in my second essay show that managers’ earnings management through classification shifting is significantly influenced by the degree of financial statement comparability with other firms. I also find that comparable firms engage in less classification shifting and that the impact of comparability is more pronounced after the passage of the Sarbanes Oxley Act. The results presented in my third essay show that companies audited by non-Big4 auditors are less comparable than the companies audited by Big4 auditors. Non-Big4 auditors are thus less likely to be able to apply the same audit process to multiple clients. I find that this results in greater audit effort, as proxied by higher audit fees, for Non-Big4 firms.

I examine whether cultural differences in trust towards others, materialism, and risk aversion lower financial statement comparability between countries that require International Financial Reporting Standards (“IFRS”). Evidence from various academic disciplines suggest that cultural beliefs and values affect individuals’ estimates and judgments and their consequent decisions, including economic and financial decisions. I posit that certain cultural beliefs and values also affect the estimates and judgments of corporate managers, resulting in inconsistent reporting decisions for given economic events and lower financial statement comparability. I find that two countries have lower comparability when there are greater cultural differences in trust towards others, materialism, and risk aversion. In cross-sectional tests, I find weak evidence that stronger enforcement of IFRS moderates the cultural effects on cross-country financial statement comparability. Stronger enforcement of regulations and law does not moderate the cultural effects. These findings suggest that having a strong IFRS, regulatory, or legal enforcement does not effectively moderate the impact of culture on cross-country financial statement comparability. A possible explanation is that cultural influence on financial reporting is also manifested through enforcement officials; in other words, those in charge of the enforcement are also subject to the same cultural beliefs and values as others involved in the reporting process, making moderation less likely.