International accounting harmonization and global equity markets

Article Abstract:

Price informativeness and trading volume may be severely affected by government efforts to harmonize US generally accepted accounting principles (GAAP) with foreign GAAP in international financial markets. These efforts stem from the belief of many government regulators that the adoption of common International Accounting Standards will improve the performance of member nation's capital markets. International GAAP harmonization actually decreases domestic price informativeness, trading volume and market performance measures.

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The association between stock returns and foreign GAAP earnings versus earnings adjusted to U.S. GAAP

Article Abstract:

The information content of reported earnings of firms based on foreign generally accepted accounting principles (GAAP) and US GAAP are studied. Results show that earnings based on foreign GAAP provide more information than those based on US GAAP with regards to stock returns. Errors associated with firm-specific industry or structural factors are also avoided by comparing foreign- and US GAAP-based earnings for the same fiscal year.

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The relevance of the value relevance literature for financial accounting standard setting: another view

Article Abstract:

Research is presented describing the study of standard setting accounting literature to determine the benefit of employing value-relevance theories in business accounting.

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