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Benchmark Management During Australia's Transition to International Accounting Standards
Article first published online: 13 MAR 2012
DOI: 10.1111/j.1467-6281.2012.00357.x
© 2012 The Authors. Abacus© 2012 Accounting Foundation, The University of Sydney
Additional Information
How to Cite
BENTWOOD, S. and LEE, P. (2012), Benchmark Management During Australia's Transition to International Accounting Standards. Abacus, 48: 59–85. doi: 10.1111/j.1467-6281.2012.00357.x
Publication History
- Issue published online: 13 MAR 2012
- Article first published online: 13 MAR 2012
- Abstract
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Keywords:
- IFRS;
- Benchmark management;
- Earnings management;
- AIFRS
Practitioners and commentators have raised concerns that Australian companies exploited opportunities to benchmark manage during the transition to international financial reporting standards (IFRS). However, as yet, no paper has explored this possibility. This study analyses the reconciliations of AGAAP into AIFRS for 457 companies listed on the ASX 500. Results show that 16.85% of companies provided erroneous information of a material nature in their reconciliations and that, on the balance of probabilities, 5.03% of companies in the sample managed their prior year's earnings benchmarks. This has implications for countries considering whether to adopt IFRS and countries which have already established timetables for their transitions.