Accounting quality as mediating factor between the adoption of IFRS and cost of equity capital
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2016-12-19
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en
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Abstract
This thesis examines whether accounting quality is a mediating factor between the mandatory adoption of IFRS and cost of equity capital. This is done using the following research question: To what extent does accounting quality influence the relationship between the adoption of IFRS and cost of equity capital? The research sample consists of 162 firms from the Netherlands, Sweden and Finland that mandatory adopted IFRS in 2005. A total of 854 firm-years is used in this thesis. The research does not find evidence that accounting quality is a mediating factor between the mandatory adoption of IFRS and cost of equity capital. More specifically, the regression analysis does not show a significant increase in accounting quality after the mandatory adoption of IFRS. By contrast, the regression analysis shows a significant decrease in cost of equity capital after the mandatory adoption of IFRS. However, the significant effect on cost of equity capital disappears after controlling for several factors.
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Faculteit der Managementwetenschappen