Journal of Commerce and Accounting Research

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Relation between Timely Loss of Recognition and Financial Situation


Affiliations
1 Faculty of Economic Sciences and Management of Tunis, University of Tunis El Manar, Campus Universitaire, Tunisia
2 Professor of Finance, Faculty of Economic Sciences and Management of Tunis, University of Tunis El Manar, Campus Universitaire, Tunisia
     

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This study analyses the impact of the transition to international accounting standards on a fundamental characteristic of accounting information, namely accounting conservatism. It is noteworthy that the impact of the change in accounting standards on accounting conservatism will be assessed through an organisational characteristic, that is, the level of indebtedness. We have chosen to focus on the French context, because it follows standards that differ from the Anglo-Saxon accounting standards. The selected sample therefore includes French companies belonging to the SBF 120 index monitored over the period 2002 to 2012. Thus, the objective of this research is to test the impact of the adoption of international accounting standards, i.e. IFRS, standards considered by a large majority as being of high quality, on the accounting conservatism of companies, based on a financial characteristic, i.e. their level of indebtedness. After a rigorous empirical analysis, we noted that the change in accounting standards did not lead to an increase in the level of accounting prudence for the organisational characteristic of indebtedness, regardless of the company’s level of debt.

Keywords

IFRS, Debt, Accounting Conservatism
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  • Relation between Timely Loss of Recognition and Financial Situation

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Authors

Basma Ben Néfissa
Faculty of Economic Sciences and Management of Tunis, University of Tunis El Manar, Campus Universitaire, Tunisia
Faouzi Jilani
Professor of Finance, Faculty of Economic Sciences and Management of Tunis, University of Tunis El Manar, Campus Universitaire, Tunisia

Abstract


This study analyses the impact of the transition to international accounting standards on a fundamental characteristic of accounting information, namely accounting conservatism. It is noteworthy that the impact of the change in accounting standards on accounting conservatism will be assessed through an organisational characteristic, that is, the level of indebtedness. We have chosen to focus on the French context, because it follows standards that differ from the Anglo-Saxon accounting standards. The selected sample therefore includes French companies belonging to the SBF 120 index monitored over the period 2002 to 2012. Thus, the objective of this research is to test the impact of the adoption of international accounting standards, i.e. IFRS, standards considered by a large majority as being of high quality, on the accounting conservatism of companies, based on a financial characteristic, i.e. their level of indebtedness. After a rigorous empirical analysis, we noted that the change in accounting standards did not lead to an increase in the level of accounting prudence for the organisational characteristic of indebtedness, regardless of the company’s level of debt.

Keywords


IFRS, Debt, Accounting Conservatism

References