We study the determinants of earnings opacity in the six largest Latin American economies (Argentina, Brazil, Chile, Colombia, Mexico, and Peru), in particular the effects of adopting IFRS. Using panel data on 871 listed firms during the period 2000 to 2016, we find that in Latin America the adoption of IFRS caused firms to substitute high quality audit practices with the newly imposed regulation, to the extent that its effect on the degree of opacity in the region became unintendedly positive. The results hold after a number of robustness checks. Thus, we provide compelling evidence against the belief that the mere adoption of the IFRS is sufficient to guarantee transparency in emerging markets.
|Número de páginas||12|
|Publicación||Emerging Markets Review|
|Estado||Publicada - 1 mar. 2019|
Nota bibliográficaFunding Information:
We are grateful to two anonymous referees as well as seminar participants at the XVII International Finance Conference (Santiago de Chile) for useful comments. We also thank Cinzia Delfino for valuable research assistance. We gratefully acknowledge the financial support of the Universidad del Pacifico Research Center and of the EGADE Business School. We alone are responsible for the views expressed and for any errors that may remain in this paper.
© 2018 The Authors
- Accounting regulation
- Audit quality
- Earnings management
- Policy effects