Findings and Discussion Related to the Impacts of IFRS/TFRS Adoption

Abstract

International Financial Reporting Standards (IFRS) are implemented in many countries to strenghten the integration of capital markets, enable transparency and comparability of financial reports. Nevertheless, it is aimed to form set of high quality reporting standards. European Union requires the firms of member countries to adopt IFRS. In our country, publicly held companies have been required to adopt Turkish Financial Reporting System (TFRS), which is identical with UFRS, since 2008. Many firms have started to adopt voluntarily before the mandatory adoption date of IFRS, whereas others have done after mandate. In this study, the effects of local IFRS adoption in the world and TFRS adoption in Turkey are examined in three main topics: harmonisation, accounting quality and capital markets. Findings for the effects of voluntarily and mandatory adoption on comparability are mixed. By contrast, it is possible to document results such as increase in transparency and quality of earnings, more value relevance, more timely loss recognition, less earning management. Strong evidences for positive impact on equity and debt markets efficiency are also observed. Having benefits of recent papers related to the effects of IFRS/TFRS adoption, this study contribute the literature with regard to suggesting insights about the direction of future studies and fields with research need as well as classification it makes.