HARMONIZATION OF INTERNATIONAL ACCOUNTING STANDARDS: AN EMPIRICAL ANALYSIS OF JAPANESE FIRMS
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초록
This study examines the markets responsiveness to the earnings announcements ofJapanese firms that use U.S. GAAP compared to Japanese GAAP by investigating earnings response coefficients. The empirical results show similar earnings response coefficientsfor U.S. GAAPfirms compared to those ofJapanese GAAPfirms. The results suggest that investors perceptions o f the quality o f a firm s external reporting system that uses U.S. GAAP have similar earnings oise as when afirm uses Japanese GAAP. Ifthis is the case, thefindings ofthis study suggest that the SEC should not require foreign registrants to use U.S. GAAP to list in the U.S. stock market because there are no incremental benefits other than reduced noise and there are significant translation costs. Instead, the SEC should support harmonization o f international accounting standards.
Abstract
This study examines the markets responsiveness to the earnings announcements ofJapanese firms that use U.S. GAAP compared to Japanese GAAP by investigating earnings response coefficients. The empirical results show similar earnings response coefficientsfor U.S. GAAPfirms compared to those ofJapanese GAAPfirms. The results suggest that investors perceptions o f the quality o f a firm s external reporting system that uses U.S. GAAP have similar earnings oise as when afirm uses Japanese GAAP. Ifthis is the case, thefindings ofthis study suggest that the SEC should not require foreign registrants to use U.S. GAAP to list in the U.S. stock market because there are no incremental benefits other than reduced noise and there are significant translation costs. Instead, the SEC should support harmonization o f international accounting standards.