Journal
JOURNAL OF ACCOUNTING RESEARCH
Volume 53, Issue 3, Pages 593-631Publisher
WILEY
DOI: 10.1111/1475-679X.12076
Keywords
institutional investors; mutual funds; corporate governance; U.S . GAAP; financial statement comparability; auditor selection; analyst forecasts
Categories
Funding
- University of Chicago Booth School of Business
- Centel Foundation/Robert P. Reuss Faculty Research Fund
Ask authors/readers for more resources
This paper investigates whether foreign institutional investors affect the global convergence of financial reporting practices. Using several measures of reporting convergence, we show that U.S. institutional ownership is positively associated with subsequent changes in emerging market firms' accounting comparability to their U.S. industry peers. We identify this association using an instrumental variable approach that exploits exogenous variation in U.S. institutional investment generated by the JGTRRA Act of 2003. Further, we provide evidence of a specific mechanismthe switch to a Big Four audit firmthrough which U.S. institutional investors affect reporting convergence. Finally, we show that, for emerging market firms, an increase in comparability to U.S. firms is associated with an improvement in the properties of foreign analysts' forecasts.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available