Stock market reaction, financial reporting quality and International Financial Reporting Standards (IFRS) convergence of listed firms in China

摘要

This study examines stock market reaction to the event associated with the mandatory implementation of IFRS in China and the impact on quality of financial reporting. The finding indicates that the implementation of IFRS did not convey significant levels of new information to the markets. The result is significant as it differs from previous studies conducted in the European Union countries and the USA whose accounting standards are already in close proximity to the IFRS. The result suggests that the total assets and total liabilities of the Chinese companies are significantly higher under IFRS than in the Chinese GAAP, which is consistent with the fair value orientation of IFRS.