This paper relates to the financial effects of the official adoption of
International Financial Reporting Standards (IFRS) in the US. IFRS is a set of
unique, high-quality accounting standards that listed firms have been obliged to implement since 2005 in Europe. However, in 2007, the SEC decided to allow foreign firms
listed in the US stock markets to publish their financials under IFRS without
the need to reconciliate to the US GAAP. That fact increased the proportion of
the converging process between the two regimes but provoked several core
questions of interest to both academics and market professionals. In this
order, the paper aims to detect any financial statement effects under IFRS for
firms that used to follow US GAAP, to analyse whether the acceptance of IFRS in
the US has improved the level of convergence between the two regimes, and
provide evidence on whether listed firms in US markets exhibited fewer earnings management under IFRS. In this way, the paper tested a total of
three Hypotheses, by involving quantitative analysis of secondary numerical data, from firms listed in the US
stock markets that followed IFRS during the first allowance year (2007). The
findings reveal that IFRS has not succeeded in eliminating falsified
statements entirely but has performed better compared to other
countries where they have been introduced. It seems that the US environment
is appropriate for IFRS. Additionally, there are indications for fewer earnings management in the first IFRS adoption
year, keeping a high level of accurate accounting interpretation. However,
special attention i
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