Timing equity issuance in response to mandatory accounting standards change in Australia and the European Union
Why this work is in the frame
A frame that forgets how it found something cannot be audited. These are the routes that admitted this work.
Bibliographic record
Abstract
This study examines the association between changes in accounting performance resulting from mandated adoption of International Financial Reporting Standards (IFRS) and managerial incentives to engage in opportunistic equity issuance.Based on 2,719 Australian and the European Union firms that are required to adopt IFRS starting in 2005, I find that firms disclosing a material decline in reported net income under IFRS relative to reported net income under local standards are revalued downwards, while firms disclosing a material improvement in reported net income under IFRS relative to reported net income under local standards are revalued upwards.This indicates that relative to financial statements prepared according to local accounting standards, financial statements under IFRS convey new information that impacts market value.Building on the market timing hypothesis, I find that managers exploit their private information about the effects of changes in accounting standards on accounting performance and that managers strategically time equity issuance before their firms disclose those effects.In particular, during the three-year window prior to a firm disclosing the financial statement effects of IFRS adoption, the firm's likelihood and size of equity issuance are negatively associated with the change in reported net income resulting from IFRS adoption.This is consistent with the prediction that firms whose reported performance is negatively affected by mandated changes in accounting standards are more likely to issue equity and issue a larger volume of equity in advance of the disclosure of those negative effects.The association between equity issuance and the
Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.001 |
| Meta-epidemiology (narrow) | 0.001 | 0.001 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.004 |
| Open science | 0.001 | 0.004 |
| Research integrity | 0.000 | 0.001 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it