Date of Conferral

2016

Degree

Doctor of Business Administration (D.B.A.)

School

Management

Advisor

Mohammad Sharifzadeh

Abstract

Companies throughout the world use different methods for reporting their financial information to capital market investors and regulators. These different methods have caused financial reporting of statements to become less transparent, has increased adjustment errors and forecasting errors, and has reduced investor confidence. As a result, the International Accounting Standards Board created International Financial Reporting Standards (IFRS) to establish a global standard. Currently, 140 jurisdictions worldwide have implemented IFRS. The purpose of this study was to examine the effectiveness of IFRS on 248 Canadian companies and to analyze whether the 2011 implementation of IFRS affected corporate stock prices, key financial measurements of companies, and industry sectors. Arrow's social choice theory and general equilibrium analysis provided the theoretical framework for this quantitative investigation. Two 1-year time periods, 2009-2010 (the year before IFRS was implemented) and 2011-2012 (the year after IFRS was implemented), were analyzed using secondary data. A multiple regression model was used to examine the impact of IFRS implementation on price-to-earnings ratio, price-to-sales ratio, and price-to-cash flow ratio of the 248 Canadian companies. Findings indicate that IFRS led to an overall improvement in financial reporting by Canadian companies, which suggests IFRS's effectiveness. Mandating IFRS worldwide may facilitate comparisons of corporate financial information, reduce costs, reduce investor fatigue, improve adjustment errors and forecasting errors, and provide capital market participants the confidence to make valued investment decisions, leading to positive social change.

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