Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1003129 | Journal of International Accounting, Auditing and Taxation | 2015 | 10 Pages |
This study examines the relationship between the value relevance of accounting information and the conditional conservatism of the European banking sector. Using a bank data set from 15 European countries we study the value relevance of accounting information before and after mandatory IFRS adoption, as well as the extent to which conditional conservatism and value relevance coexist in this context. Our findings suggest that conditional conservatism is positively (negatively) related to value relevance prior to (post) mandatory IFRS adoption. This finding validates the IASB's objectives of higher value relevance and lower conservatism. Additional analyses provide evidence that country-specific features not only affect the potential increase in accounting quality, but also the relationship between value relevance and conditional conservatism.