Impact of IFRS on accounting quality in Finland: Correlation between Net Income and Operating Cash Flow after the adoption of IFRS in Finnish companies.
Karim, Modasser (2017)
Karim, Modasser
Yrkeshögskolan Arcada
2017
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2017060111725
https://urn.fi/URN:NBN:fi:amk-2017060111725
Tiivistelmä
As a member state of the European Union, Finland is required to follow the common In-ternational Financial Reporting Standards (IFRSs) from 2002. In fact, most of the listed companies in Finland has complied with International Accounting Standard regulations since 2004. The differences between IFRSs and traditional Finnish expenditure-revenue accounting theory are revealed clearly in the calculation of fair value. Additionally, the strict requirements in IFRS makes an improvement in the preparation of consolidated fi-nancial statements of the Finnish companies. As more details and information are request-ed, Finnish financial reporting framework can be closer to the international capital market. However, it only qualitatively proves the positive changes in the Finnish financial report-ing system, not the accounting quality.
To understand better the impact of IFRS, the quantitative research is carried out with the linear regression model. The survey over eight Finnish listed company’s return the mix results while 50% of observations show the positive impact of IFRS. Despite the disad-vantages of the small observations, the test suggests that the enforcement of IFRS does harmonize FAS with IAS, but insignificantly improve the accounting quality in the re-searched companies.
To understand better the impact of IFRS, the quantitative research is carried out with the linear regression model. The survey over eight Finnish listed company’s return the mix results while 50% of observations show the positive impact of IFRS. Despite the disad-vantages of the small observations, the test suggests that the enforcement of IFRS does harmonize FAS with IAS, but insignificantly improve the accounting quality in the re-searched companies.