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    Accounting standards complexity, audit fees and financial analyst forecasts in Australia : a thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy in Accounting at Massey University, Albany, New Zealand
    (Massey University, 2017) Miah, Muhammad Shahin
    While the beneficial effects of International Financial Reporting Standards (IFRS) on financial reporting quality, cost of capital, cross-country investment, corporate decision making and governance are well studied in the literature, there is relatively little research on the cost side of IFRS adoption and its impact on users. This thesis contributes by investigating the impact of IFRS complexity on two important groups of users of financial reports namely auditors and financial analysts. The hypotheses are built on the premise that principles-based standards are more complex than rules-based standards. This study examines the relationships between IFRS complexity, audit fees, and analyst forecast properties. IFRS is likely to require more of auditors in terms of professional expertise, time and effort, hence resulting in higher audit fees. Financial analysts may be similarly affected by the complexity of IFRS resulting in less accurate forecasts on key financial components. This thesis measures IFRS complexity based on individual IFRS standards specifically identified as having higher levels of complexity. Scores are then calculated to indicate the difference between these IFRS standards and their equivalent previous domestic accounting standards. The degree of complexity is also measured at aggregate level to indicate an overall complexity impact based on the combined score for all identified 'complex' IFRS standards. Findings indicate that aggregate IFRS complexity is positively and significantly associated with audit fees but that specific IFRS standards are identifiable as being paiticularly complex, hence explaining much of the positive relationship with audit fees. The results also reveal that the incremental effect of IFRS complexity on audit fees is more pronounced when finns are audited by city-level industly specialists as opposed to those audited by non­industly specialists. Furthermore, IFRS complexity is found to have a positive and significant association with analyst forecast properties (forecast errors, forecast dispersion, and forecast revision). Surprisingly some of the standards identified as being more complex for auditors (i.e., driving higher audit fees) do not appear similarly complex in relation to financial analyst forecast properties. Finally, this thesis investigates the moderating role of high quality audits (proxied by industry specialist auditors) on complexity and analyst forecast properties and finds that forecast errors decrease for firms which are exposed to higher levels of IFRS complexity if they are audited by city-level industly specialists. This study provides important insights for regulator regarding the complexity of specific IFRS standards. Findings may also be of benefit to countries which are in the process of adopting IFRS or planning to do so.
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    A study of early and late adopters of International Financial Reporting Standards in New Zealand : a thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy in Accounting at Massey University, Albany, New Zealand
    (Massey University, 2011) Stent, Warwick
    This study investigates accounting choice relating to the timing of adoption of International Financial Reporting Standards (IFRS) in New Zealand i.e., the choice to voluntarily early adopt IFRS or to defer adoption of IFRS until it became mandatory. Results for 40 early adopters are measured against those of a control group of 40 late adopters. The study includes an examination of the impact of IFRS on financial information (IFRS differences), as well as analyses of qualitative information obtained from discretionary narratives in annual reports, questionnaires and interviews. Significant IFRS differences are found for most financial statement elements and ratios for both early and late adopters. However, when IFRS differences for early adopters are compared to those for late adopters, the difference-in-differences are not found to be significant. Hence, IFRS differences result in incentives which may influence adoption timing, but these incentives are not significantly different for early and late adopters. Content analysis of discretionary narratives in annual reports reveals significant differences for all four of the measures used to assess the extent of disclosures, with early adopters providing typically twice as much disclosure as late adopters. Further analysis relating to the nature of disclosures reveals three major themes: ‘informing of importance’, ‘potency’ and ‘evaluative’. For the first two of these themes, significant differences are found and early adoption persists as a significant explanatory variable, after controlling for other incentives for voluntary disclosure, such as firm size, auditor and industry. ‘Evaluative’ disclosures are made by relatively few firms; are predominantly negative regarding IFRS adoption and no significant differences between early and late adopters are found for this theme. Disclosure findings reflect that early adopters attach a higher level of importance to IFRS adoption than late adopters. Survey data reveals significant differences for one of six measures of costs of IFRS as well as for a constructed ‘overall benefits’ score and three of nine individual benefits assessed. Also, three further themes emerge from content analysis of responses regarding motivations for adoption timing, namely ‘activity’, ‘manageability’ and ‘accounting choice’. Overall, the findings triangulate to suggest that ‘accounting choice’ has less explanatory power, with regard to adoption timing decisions, than ‘other factors’ which are unrelated to the impact of IFRS on accounting information. Examples of such ‘other factors’ include the level of importance which firms attach to IFRS adoption; evaluations of the consequences of IFRS (predominantly neutral or negative) and perceptions as to the manageability of IFRS adoption (unexpected factors influence deferral). Adoption timing decisions of both early and late adopters are found to be predominantly ‘dynamic’ (proactive) rather than ‘static’ (passive) activity.
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    Has IFRS resulted in information overload?
    (2010) Morunga, M.; Bradbury, M. E.
    The move to NZ IFRS has been surrounded by complaints of too much information being provided. This is not simply a matter of the cost of providing the information, but the possibility of data overload. Data overload is an important issue as it impacts information search strategies and decision outcomes. This relevant for the current debate on differential reporting and for assessing whether NZ IFRS has achieved its goals of reducing the cost of financial analysis. The purpose of this paper is to examine the impact of the move to international financial reporting by New Zealand listed entities on the quantity of data provided in the annual report. Our analysis shows that the annual report increased for 92% of our sample firms. The average increase in size was 29% of the prior years‟ annual report and arose through notes to the accounts and accounting policies. Even after transitional information (e.g., accounting policies and reconciliations) the increase is 15%.