IMPLICATIONS OF IFRS ADOPTION ON EARNINGS QUALITY,
EMPIRICAL CASE FOR ROMANIAN ENVIRONMENT
Burca Valentin, West University of Timisoara
Mates Dorel, West University of Timisoara

Abstract: Globalization process has determined visible changes on international accounting

regulation, describing a predictive direction of financial reporting development towards IFRS
adoption. IFRS is perceived, within the international accounting convergence project, as the unique
financial reporting language which lead to more comparable financial information, a higher
transparency and an improvement of value relevance. Romanian IFRS adoption case is a specific as
the main reasons determining IFRS adoption were mainly defined by the pressure of the international
financial institutions and the political factor, not by market-driven motivations. Mandatory IFRS
adoption hasn’t generated the expected economic benefits as the incentives for a real adoption did
not cover the high implementation costs. Our study is aimed to check earnings quality ex-ante and
ex-post IFRS adoption. Overall, there is evidence that earnings quality increase, but not in a
spectacular proportion as the differences between local GAAP and IFRS regarding the main
controversial accounting topics are significantly reduced along the last ten year.
Key words: IFRS, accruals, earnings management, regression.

JEL: M40, M41, G33.