Over the past several decades, accounting standard setters have been gradually shifting financial reporting toward an asset/liability view, by rewriting the underlying conceptual framework and issuing accounting standards that reflect this view. The asset/liability view enhances comparability of a firms investment base to that of its peers, and thus enhances the comparability of a firms return of equity (ROE). This, in turn, increases the transparency with which firm-specific performance differs from its peers. Greater transparency would be expected to improve predictive usefulness, but would also place greater pressure on a firm to meet the performance of its peers. In the US, I find that predictive usefulness has generally increased with the shift, indicating that rather than resulting in greater earnings management designed to mask firm-specific differences, the shift resulted in greater transparency of firm-specific accounting information. I also find predictive usefulness has increased in countries that have adopted IFRS, indicating that a further shift toward an asset/liability view to include the greater use of fair values common in IFRS further increased transparency of firm-specific accounting information in adopting countries. This suggests that expanding the use of fair values and/or adopting IFRS in the US may also result in greater reporting transparency. But as the predictive usefulness increases, I find that analysts in the US are not increasing their reliance on firm-specific accounting information, suggesting analysts remain skeptical, even though analysts would likely increase the efficiency in which they form their forecasts by relying more on accounting information.
| Identifer | oai:union.ndltd.org:LSU/oai:etd.lsu.edu:etd-06032014-123906 |
| Date | 08 July 2014 |
| Creators | Rosa, Regina Cavalier |
| Contributors | Cheng, Christine, Watson, Edward, Liu, Carol, Tiras, Samuel |
| Publisher | LSU |
| Source Sets | Louisiana State University |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lsu.edu/docs/available/etd-06032014-123906/ |
| Rights | unrestricted, I hereby certify that, if appropriate, I have obtained and attached herein a written permission statement from the owner(s) of each third party copyrighted matter to be included in my thesis, dissertation, or project report, allowing distribution as specified below. I certify that the version I submitted is the same as that approved by my advisory committee. I hereby grant to LSU or its agents the non-exclusive license to archive and make accessible, under the conditions specified below and in appropriate University policies, my thesis, dissertation, or project report in whole or in part in all forms of media, now or hereafter known. I retain all other ownership rights to the copyright of the thesis, dissertation or project report. I also retain the right to use in future works (such as articles or books) all or part of this thesis, dissertation, or project report. |
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