IFRS adoption and company conservatism in Colombia and Brazil

Marta Cristina Pelucio-Grecco, Cecilia Moraes Santostaso Geron, Hugo Arles Macias-Cardona

Abstract


We analysed changes in the levels of conservatism in Colombia and Brazil after International Financial Reporting Standards (IFRS) adoption, in accordance with the theory of cultural influence in accounting (Gray, 1988). We found that IFRS adoption resulted in decreased conservatism of accounting practices in Brazil; however, it resulted in increased conservatism in Colombia. We found uniformity in conservatism among economic sectors in Brazil. In Brazil and Colombia, the industrial, investment, commercial, and financial sectors showed a decrease in conservatism, as expected. The service and public sectors showed an important increase in conservatism in Colombia, however.

Keywords


IFRS; theory of cultural influence; conservatism index; Brazil; Colombia

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ISSN: 1984-8196 - Best viewed in Mozilla Firefox

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