Accounting quality in the pre-/post-IFRS adoption periods and the impact on audit committee effectiveness - Evidence from Australia

In this paper we examine whether accounting quality has improved following the adoption of International Financial Reporting Standards (IFRS), and investigate whether audit committees are more effective in promoting accounting quality under IFRS than previous Australian GAAP. We analyse two hundred companies listed on the ASX from 2003 to 2008 and employ univariate and multiple regression models to test developed hypotheses. Our results suggest that accounting quality is not significantly enhanced subsequent to the adoption of IFRS in Australia. In addition, we find that audit committees are more effective in maintaining accounting quality under IFRS than under previous Australian GAAP (AGAAP). The findings of our study help regulators by showing the impact of IFRS and audit committee characteristics on accounting quality. (C) 2015 Elsevier B.V. All rights reserved.