آشنایی،جانبداری اصلی و واکنش سرمایه گذاران به سود مصالحه 20-اف و زیان و ادراک از کیفیت اصول حسابداری
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|20841||2008||20 صفحه PDF||سفارش دهید||11659 کلمه|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : The British Accounting Review, Volume 40, Issue 2, June 2008, Pages 103–122
This paper examines whether financial statements based on home GAAP (Generally Accepted Accounting Principles) (Irish GAAP), versus non-home GAAP (US GAAP), have differential effects on Irish investors’ financial assessments of a firm. The paper also extends Maroney and Ó hÓgartaigh's (2005) study by investigating whether perceptions of US GAAP and Irish GAAP financial statements and the gains and losses represented in 20-F reconciliations differ between non-US (Irish) and US users of financial statements. The paper adopts an experimental method involving 105 non-US (Irish) participants and 49 US participants. The current study provides evidence that non-US investors react very differently to reconciliation gains and losses than do US investors. In fact, the non-US investors react conversely to US investors in that they perceive the risk of firms filing 20-F reconciliations with reconciliation losses to be lower, and the quality of accounting principles higher, than firms filing 20-F reconciliations with reconciliation gains. Our study also finds that the non-US participants were more confident in making their quality assessment for the home GAAP (Irish GAAP) financial statements than for the non-home GAAP (US GAAP) financial statements. However, despite this difference in confidence level, the financial assessments of the firm preparing home GAAP (Irish GAAP) financial statements versus non-home GAAP (US GAAP) financial statements were not significantly higher. Together, these results help to shed light on the cause of what has been termed a ‘home bias’ phenomenon, whereby domestic investors exhibit a strong preference for domestic versus foreign markets suggesting in particular that ‘home bias’ derives in part from an increased confidence in ‘home GAAP’.
IFRS (International Financial Reporting Standards)/US GAAP (US Generally Accepted Accounting Principles) convergence is a key objective of international accounting standard-setters and regulators (including the US Securities and Exchange Commission (SEC)). In that context, prior to 15 November 2007, foreign registrants on US stock exchanges were required by the SEC to file financial statements prepared under US GAAP or, alternatively, if their financial statements did not comply with US GAAP, they were required to reconcile (by way of a ‘20-F reconciliation’) those financial statements with US GAAP (with some exceptions if complying with International GAAP). From 15 November 2007, after “extensive and informative public comment”, the “financial statements of foreign private issuers in the US will be accepted without reconciliation with US GAAP only if they are prepared using IFRS as issued by the IASB” (SEC, 2007a).3 Furthermore, the SEC is currently considering whether to allow US issuers to prepare their financial statements in accordance with the IFRSs of the IASB instead of US GAAP (SEC, 2007b). The debate surrounding this decision has been accompanied by assertions regarding the superior ‘quality’ of US GAAP and its status as a benchmark or ‘gold standard’ of accounting principles, “since the US is a leader in accounting standard-setting” as summarized by Dye and Sunder (2001, p. 265). Maroney and Ó hÓgartaigh (2005) find that US subjects perceive the risk of firms filing 20-F reconciliations with reconciliation losses to be higher, and the quality of accounting principles lower, than firms complying with US GAAP or filing 20-F reconciliations with reconciliation gains. Krishnamoorthy et al. (2008) extended Maroney and Ó hÓgartaigh (2005) to determine if identical information with respect to US GAAP is evaluated differently by US financial professionals depending on whether the information is presented in a positive (20-F reconciliation gain) or negative (20-F reconciliation loss) way. A primary purpose of this paper is to further extend Maroney and Ó hÓgartaigh (2005) to assess whether such perceptions of the quality of accounting principles for financial statements based on US GAAP carry across cultural and regulatory boundaries or, alternatively, whether they are constructs of their context. We do this by examining whether financial statements based on home GAAP (Irish GAAP), versus non-home GAAP (US GAAP), have differential effects on Irish investors’ assessment of the quality of accounting principles of a firm and their confidence in making this assessment. The second primary purpose is to further examine investors’ perceptions of a firm's risk, financial performance and quality of accounting principles based on financial statements prepared under different GAAPs by assessing whether the 20-F reconciliation required by the SEC had differential effects on these perceptions depending upon the direction of the items included in the 20-F reconciliation (gain or loss) and the national background of the users (US or non-US) of the financial statements. Maroney and Ó hÓgartaigh (2005) involved only US investors. The decisions of US investors may be shaped by familiarity with US GAAP and the use of US GAAP as a benchmark against which earnings and stockholders’ equity are assessed. Global and US equity markets are increasingly populated by international, non-homogeneous categories of investors. Thus, the present study extends the Maroney and Ó hÓgartaigh (2005) study to include the reactions of groups of non-US (i.e. Irish) investors to reconciliation gains and losses between Irish GAAP and US GAAP. Using the same experimental instrument for non-US subjects as that employed by Maroney and Ó hÓgartaigh (2005) for their US subjects, this paper assesses whether the negative reaction to 20-F reconciliation losses found in Maroney and Ó hÓgartaigh (2005) extends beyond the US context to non-US subjects and non-US GAAP.4 The paper, as a result, examines the extent to which decisions by US and non-US investors may be shaped by familiarity with US GAAP and the use of US GAAP and non-US GAAP (or ‘home GAAP’) as a benchmark against which earnings and stockholders’ equity are assessed. The paper finds first, that the non-US (Irish) subjects were significantly more confident in making their quality assessment for the home GAAP (Irish GAAP) financial statements than for the non-home GAAP (US GAAP) financial statements. However, despite this difference in confidence level, other financial assessments of the firm preparing its financial statements under home GAAP (Irish GAAP) versus non-home GAAP (US GAAP) were not significantly higher. Taken together, these findings provide additional insights into research that has reported on the ‘home bias’ phenomenon whereby domestic investors exhibit a strong preference for domestic versus foreign markets (see, for example, French and Poterba, 1991; Uppal, 1992; Cooper and Kaplanis, 1994; Bradshaw et al., 2004). Uppal (1992), in particular, finds little support for conventional economic explanations of ‘home bias’: this paper therefore extends our understanding of ‘home bias’ by providing a behavioral explanation of this phenomenon, finding evidence that it may result from a ‘confidence in the familiar’ (Barth et al., 1999; Sunder, 2002; Li, 2004). Second, we find that US and non-US investors react differently to the direction of items included in a 20-F reconciliation. We find that the US participants react more favorably to a firm with a reconciliation increase than do the non-US participants, as measured by their assessment of the risk of investing in the firm and the quality of the firm's accounting principles. Conversely, the non-US participants react more favorably to a firm with a reconciliation decrease than do the US participants, as measured by their assessment of the risk of investing in the firm and the quality of the firm's accounting principles. This finding suggests that 20-F reconciliations may result in differing financial assessments of a firm depending upon the ‘home GAAP’ of the subject and the direction of the reconciliation items. Together, these results contribute to the current consideration of the reporting requirements of foreign and US registrants on US exchanges by suggesting that there may be trans-national asymmetries between the perceptions of investors of the quality of US GAAP and, more importantly, in an international context, home GAAP vis-à-vis US GAAP.