IFRS adoption and accounting-based performance measures: evidence from an emerging capital market Open Access
Bibliographic record
Abstract
Purpose This study aims to examine the economic consequences of the adoption of International Financial Reporting Standards (IFRS) in Saudi Arabia. More specifically, the study examines the impact of the mandatory adoption of IFRS on the accounting-based performance measures. Design/methodology/approach Data on study variables were obtained manually from the published financial statements of 67 of listed companies in the Saudi stock market during the period 2014–2019. The study addressed the research hypotheses by comparing the accounting-based performance measures computed under the Saudi accounting standards for three years (2014–2016) before the mandatory adoption of IFRS and the corresponding three years (2017–2019) after the mandatory adoption of IFRS. The Mann–Whitney U Test was used to investigate the significance of differences between the values of performance measures in the pre- and post-mandatory adoption periods. Findings The findings of the study revealed that there were no significant differences between the values of accounting-based performance measures related to the three performance categories (i.e. profitability, liquidity and leverage) in the post-mandatory adoption period (IFRS) compared to the values of these measures in the pre-mandatory adoption period (Saudi accounting standards). Research limitations/implications The results of the study indicated that there is a good convergence between the Saudi accounting standards that were implemented before 2017 and the IFRS that began to be applied starting from 2017. This convergence resulted in a low significant impact of IFRS on the financial statements of companies and then on the accounting-based performance measures calculated from them. However, this study suffers from some limitations, the most important of which is the small sample size as a result of the small number of listed companies in the Saudi market during the study period. Originality/value Although the impact of the adoption of IFRS have always been a subject of intense research in developed countries, the study of the impact of the adoption of IFRS in developing countries still limited. This study contributes to the literature by examining the economic consequences of adopting IFRS in Saudi Arabia as one of developing countries. 📚 Further Readings 📖 Does mandatory adoption of IFRS improve accounting quality? Preliminary evidence Ahmed , A. , Neel , M. and Wang , D. · (2013) · Contemporary Accounting Research , Vol. 30 No. 4 , pp. 1344 -1372 📖 An assessment of the Nigerian manufacturing sector in the era of globalization Akinmulegun , S. and Oluwole , F. · (2013) · American Journal of Social and Management Sciences , Vol. 5 No. 1 , pp. 27 -31 📖 The impact of IFRS on the relationship between conservatism and investment efficiency André , P. , Filip , A. and Marmousez , S. · (2014) · Comptabilité Contrôle Audit , Vol. 20 , pp. 101 -124 📖 Market reaction to the adoption of IFRS in Europe Armstrong , C. , Barth , M. , Jagolinzer , A. and Riedl , E. · (2010) · The Accounting Review , Vol. 85 No. 1 , pp. 31 -61 📖 Comparative value relevance among German, US, and international accounting standards: a German stock market perspective Bartov , E. , Goldberg , S. and Kim , M. · (2005) · Journal of Accounting, Auditing & Finance , Vol. 20 No. 2 , pp. 95 -119 📖 The Effects of IFRS on Financial Ratios: Early Evidence in Canada Blanchette , M. , Racicot , F. and Girard , J. · (2011) · Certified General Accountants Association of Canada , Ottawa 📖 The impact of international financial reporting standards: dies size matters? Goodwin , J. and Ahmed , K. · (2006) · Managerial Auditing Journal , Vol. 21 No. 5 , pp. 460 -475 📖 The impact of IFRS adoption on foreign direct investment Gordon , L. , Loeb , M. and Zhu , W. · (2012) · Journal of Accounting and Public Policy , Vol. 31 , pp. 374 -398 📖 International financial reporting standards (IFRS): the benefits, obstacles, and opportunities for implementation in Saudi Arabia Herath , S. and Alsulmi , F. · (2017) · International Journal of Social Science and Business , Vol. 2 No. 1 , pp. 1 -18 📖 Impact of the IFRS adoption on financial assets and liabilities: empirical evidence from Bucharest stock Exchange Huian , M. · (2015) · Review of Economic and Business Studies , Vol. 8 No. 2 , pp. 69 -90 📖 Adoption of the International Financial Reporting Standards by Greek non-listed companies: the role of coercive and hegemonic pressures Mantzari , E. , Sigalas , C. and Hines , T. · (2017) · Accounting Forum , Vol. 41 No. 3 , pp. 185 -205 📖 Perceived costs and benefits of IFRS adoption in Saudi Arabia: an exploratory study Nurunnabi , M. · (2018) · Research in Accounting Regulation , Vol. 30 No. 2 , pp. 166 -175 📖 IFRS adoption and CEO compensation: evidence from listed banks in Nigeria Ojeka , S. , Adegboye , A. , Adetula , D. , Adegboye , K. and Udoh , I. · (2019) · Banks and Bank Systems , Vol. 14 No. 3 , pp. 1 -9 📖 Assessing the impact of the mandatory conversion to IFRS on net income in Saudi Arabia Razak , R. and Alqurashi , R. · (2019) · Asia Pacific Journal of Advanced Business and Social Studies , Vol. 5 No. 1 , pp. 65 -75 📖 IFRS adoption and accounting quality of quoted manufacturing firms in Nigeria: a cross sectional study of brewery and cement manufacturing firms Umobong , A. and Akani , D. · (2015) · International Journal of Business and Management Review , Vol. 3 No. 6 , pp. 61 -77 📖 Corporate governance, earnings management, and IFRS: empirical evidence from Chinese domestically listed companies Wang , Y. and Campbell , M. · (2012) · Advances in Accounting , Vol. 28 No. 2 , pp. 189 -192 📖 The expected impact of IFRS adoption on Saudi Arabia based on lessons from other countries: a focus on the telecommunication business Xiamen , C. and Alsuhaibani , A. · (2012) · Procedia-Social and Behavioral Sciences , Vol. 62 , pp. 1190 -1198
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.006 | 0.022 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.002 | 0.002 |
| Science and technology studies | 0.000 | 0.001 |
| Scholarly communication | 0.002 | 0.002 |
| Open science | 0.000 | 0.001 |
| Research integrity | 0.000 | 0.001 |
| Insufficient payload (model declined to judge) | 0.002 | 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 itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".