Impact of mandatory IFRS implementation on earnings quality. Evidence from the Warsaw Stock Exchange
Impact of mandatory IFRS implementation on earnings quality. Evidence from the Warsaw Stock Exchange

Summary/Abstract: This paper is about the impact of the mandatory implementation of IFRS on earnings quality of com-panies listed on the Warsaw Stock Exchange. We choose earnings persistence and accruals magnitude as the proxies of earnings quality of companies. On the basis of the former research we pose a hy-pothesis that implementation of IFRS should improve the quality of earnings, measured by the earn-ings persistence and accruals magnitude. In order to verify the first hypothesis we compared the qual-ity of earnings in the period before mandatory IFRS implementation for listed companies that report consolidated financial statements and in the period after the IFRS implementation (as of the beginning of 2005). We document a weak positive influence of mandatory IFRS implementation on earnings quality. This weak positive impact of mandatory IFRS implementation was proven by earnings quality proxies. Our study covers all the firms (apart from financial institutions) that prepared financial con-solidated financial statements and were listed on the Warsaw Stock Exchange. The period of the study covers the years 1999 to 2010.

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