Document Type
Article
Publication Date
2-2012
Publisher
Elsevier B.V.
Abstract
This paper investigates the capital market consequences of the SEC's decision to eliminate the reconciliation requirement for cross-listed companies following International Financial Reporting Standards (IFRS). We find no evidence that the elimination has a negative impact on firms' market liquidity or probability of informed trading (PIN). We also find no evidence of a significant impact on cost of equity, analyst forecasts, institutional ownership, stock price efficiency and synchronicity. Moreover, IFRS users do not increase disclosure frequency nor supply the reconciliation voluntarily. Our results do not support the argument that eliminating the reconciliation results in information loss or greater information asymmetry. JEL classification: M41; G15; G18
Recommended Citation
Kim, Yongtae, Haidan Li, and Siqi Li. "Does Eliminating the Form 20-F Reconciliation from IFRS to U.S. GAAP Have Capital Market Consequences?" Journal of Accounting and Economics 53.1-2 (2012): 249-70.
Comments
NOTICE: this is the author's version of a work that was accepted for publication in Journal of Accounting and Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Accounting and Economics, Vol. 53, No. 1-2, (2012) doi:10.1016/j.jacceco.2011.05.001.