What is it about?
What drives information disclosure by public firms? The Brazilian public firms that trade American Depositary Receipts (ADR) on Stocks Exchanges in the U.S. disclose much more mandatory information by GAAP than Brazilian public firms that trade stocks only in Brazil. After the IFRS adoption (international accounting) the level of mandatory information has equaled on both countries. Then, Brazilian firms with ADR have increased the level of voluntary disclosure of economic, financial, and organizational information and social and environmental issues. In such case, Brazilian firms with more disclosure are at a disadvantage in their information environment because private firms do not disclose information at the same level.
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Why is it important?
The Accounting Standard-Setters (FASB, IASB) define the disclosure requirements. Usually market participants have more information of public companies than private companies. Then, firms to differentiate themselves disclose more voluntary information about their fundamentals, operations and social and environmental initiatives. The voluntary information can change the firms' information environment.
Perspectives
This paper is the first one to cover all periods of IFRS adoption. Moreover, the Brazilian scenario provides a specific setting, where the IFRS adoption passed by three stages, the pre-IFRS adoption (Brazilian GAAP), transition period (between 2008-2009 where the BR GAAP and IFRS were mixed) and the Post-adoption (full adoption of IFRS) in 2010. The paper describe the IFRS adoption process and its relation to voluntary disclosure and how incentives change across the IFRS adoption process.
Jose Elias Almeida
Universidade Federal do Espirito Santo
Read the Original
This page is a summary of: Effects of IFRS, Analysts, and ADR on Voluntary Disclosure of Brazilian Public Companies, Journal of International Accounting Research, March 2017, American Accounting Association,
DOI: 10.2308/jiar-51649.
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