An Empirical Research on the value-relevance of IAS/IFRS and US GAAP

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International Accounting Standards promulgated by IASC are a set of accounting standards intended to be used a basis for cross-border offerings and listing purposes in global markets. IOSCO endorsed IAS to use in cross-border offerings and other foreign listings.This study examines whether cross-listed foreign firms that the stocks are issued in not only the home country capital market but also in the main foreign capital market use domestic GAAP or "international" GAAP, if the discretion is given. The results show that crosslisted foreign firms are more likely to disclose IAS/IFRS or US GAAP financial statements as their shares trade in more equity markets. Based on the surveys in GAAP 2001, this study investigated whether analyst forecast errors are significantly associated with the extent of variation between domestic GAAP and IAS/IFRS. It was suggested that analyst forecast errors are reduced by adopting IAS/IFRS, as a result, informativeness of financial statement is improved.