Since 2007, all listed firms in China have been required to report under a new set of Chinese Accounting Standards, which is recognized by the International Accounting Standards Board (IASB) as having achieved ‘substantial convergence’ with IFRS.
- There has been a significant increase in the value relevance of reported earnings for the firms in the treatment group following mandatory adoption of IFRS-converged CAS
- The effect of IFRS-converged CAS for the treatment group is stronger for firms in the manufacturing sector
- The effect of IFRS-converged CAS is greater among Chinese listed firms with foreign ownership
- The impact of IFRS-converged CAS is significantly more pronounced among firms that receive less government subsidy