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We examine the impact of auditor choice on IFRS compliance under the assumption of strict exogeneity of auditor choice. Our results reveal that compliance is positively related to auditor choice after controlling for firm size, profitability, leverage, degree of international diversification, and whether a firm has a U.S. listing or was audited according to International Standards of Auditing. We also find that auditor choice is positively related to firm compliance when controlling for unmeasured, firm-specific effects. The results of our study reinforce the importance of developing institutional mechanisms (e.g., enforcement, auditing, or corporate governance structures) to encourage compliance with IFRS.

In this empirical study we examine whether China's efforts to converge domestic accounting standards with International Financial Reporting Standards (IFRS) over the past 15 years have resulted in the successful convergence of Chinese listed firms. This study is unique in that we evaluate convergence of firms' accounting practices from three perspectives: (1) the level of compliance with Chinese GAAP and IFRS, (2) the consistency of accounting choices under Chinese GAAP and IFRS, and (3) identification of significant differences in the net incomes produced under Chinese GAAP and IFRS (earnings gap). Using the 1999 and 2002 annual reports of 79 Chinese listed firms we find improvement in both compliance with IFRS and in the consistency of the accounting methods used in annual reports prepared under Chinese GAAP and IFRS. We also find a reduction in the earnings gap from 1999 to 2002. However, interestingly we observed that Chinese listed firms' compliance with IFRS is significantly lower than their compliance with Chinese GAAP. Overall we believe that our findings suggest that in China the convergence of accounting standards has been a conduit to the convergence of accounting practices.

A controversial area of U.S. securities regulations involves the Securities and Exchange Commission's (SEC) financial reporting requirements for foreign firms, specifically, the necessity of providing a quantitative reconciliation to U.S. GAAP (Form 20-F). The results of earnings–returns research to date indicate that the release of foreign GAAP earnings provides important information. However, the results of earnings–returns studies using reconciled information are mixed. Instead of using an earnings–returns methodology adopted in prior research, this study utilizes analysts' revisions as a market indicator of the effect of information released in foreign GAAP earnings and the reconciled information in Form 20-F. Additionally, the study investigates the influence of four firm-specific variables in the firm's information environment—similarities of accounting systems, analyst following, difference between reconciled earnings and foreign GAAP earnings, and dispersion of analysts' expectations—on positive abnormal revision activities of financial analysts at the time of filing Form 20-F. The results indicate that the release of foreign GAAP earnings (at earnings announcement dates) and reconciled information (at the time of filing Form 20-F) contains relevant information as measured by analysts' revisions. Further, variables representing analyst following, change in reconciled earnings, and dispersion of analysts' expectations are significant in explaining the variation observed in positive abnormal revisions.

This study investigates factors affecting the selection of markets for issuing foreign bonds and assesses the increase in the likelihood of issuing in a given market when certain variables are present. Logistic regression models evaluate similarity/diversity of accounting systems; disclosure levels; and the existence of a parent/subsidiary and/or an equity listing in the market country as independent variables. The results support the hypothesis that accounting diversity is an influencing factor in selection of a market for issuing foreign bonds.

The integration of international accounting topics throughout the curriculum (integration approach) is often recommended as the most preferred/desired method of internationalizing the accounting curriculum. This study presents the results of survey research on the extent of integration, use of instructional resources, and perceived incentives and obstacles to internationalizing accounting curricula through the integration approach in U.S. schools. Additionally, the paper suggests methods and instructional resources that can be used to add an international dimension into the accounting curriculum through an integration approach. The findings reveal that the integration approach of internationalization is used more frequently in undergraduate programs (61%) compared to graduate programs (52%). Financial accounting is the most frequently integrated, and auditing and taxation are the least frequently integrated areas for both undergraduate and graduate programs. The integrated lecture is the most popular method of integrating international topics into accounting courses, although other instructional resource materials such as foreign annual reports, assigned articles, and cases are also used. The findings of this study should benefit faculty currently involved in international accounting education as well as those planning on internationalizing their program in the future.