Does Mandatory IFRS Adoption Affect Crash Risk? Evidence from Taiwan

• Main Authors: YU-HSIANGWANG, 王昱翔
• Other Authors: YU-CHEN LIN
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/j35645

碩士 === 國立成功大學 === 會計學系 === 104 === The financial reporting environment changed significantly in 2013 for thousands of public companies when Taiwan mandated the adoption of International Financial Reporting Standards (IFRS). This event provides a natural setting for testing whether changes in the financial reporting environment affect firm-level crash risk. We separate crash risk to credit risk, Tobin Q score and extreme negative stock returns in order to capture the influences completely. In the empirical result of credit risk, we find a decrease in credit risk and increase credit rating scores among nonfinancial firms after IFRS adoption. Because the model is not stable, we can’t conclude that the result supports our hypothesis 1. In the empirical result of crash risk, we find a decrease in crash risk associated with mandatory IFRS adoption among nonfinancial firms. The result is consistent with prior IFRS studies and supports our hypothesis 2. In the empirical result of Tobin Q score, we find an increase in Tobin Q scores among nonfinancial firms after IFRS adoption. The result supports our hypothesis 3.