Abstract
This paper examines the impact generated for the application of International Financial Reporting Standards (IFRS) on financial report quality (accounting quality) for Latin American and Caribbean economies, by using five measurement proxies related to the magnitude of absolute discretionary accruals; accounting quality is assessed during the periods 2006 to 2014. At the same time, the effects of institutional factors and management incentives on the use of such accruals are examined as a mechanism for earnings management. The results show that during the period of application of IFRS, companies report lower magnitude of absolute discretionary accruals, indicating an inverse relationship between these two variables; these results suggest less earnings management, which is the same as higher financial report quality. It is intended to contribute to the literature by presenting generalized findings for the Latin and Caribbean region, by including in this study the majority of countries of the region over a wide period of application of IFRS, in addition to using different measurement metrics to give greater robustness to the findings.
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