ARTICLE REVIEW: DO EARNINGS REPORTED UNDER IFRS TELL US MORE ABOUT FUTURE EARNINGS AND CASH FLOWS?

ARTICLE REVIEW OF DO EARNINGS REPORTED UNDER IFRS TELL US MORE ABOUT FUTURE EARNINGS AND CASH FLOWS?
AUTHORS: T.J. Atwood Accounting Department, College of Business, Florida State University, United States.
Michael S. Drake
Department of Accounting and MIS, Fisher College of Business, The Ohio State University, United States.
James N. Myers and Linda A. Myers
Department of Accounting, Sam M. Walton College of Business, University of Arkansas, United States.
JOURNAL: Elsevier Journal of Accounting and Public Policy vol30 page 103–121
YEAR: 2011
REVIEWED BY: NUREIN SAHEED ADEBOWALE ([e-mail]. Tel: [phone])
INTRODUCTION
The movement toward global acceptance of IFRS has generated considerable attention and debate.Proponents maintain that requiring U.S. firms to report under IFRS will enhance the comparability of financial reports across countries and will bring greater efficiency to firms reporting across multiple jurisdictions (Covrig et al., 2007; Kim et al., 2007; Turley, 2007; Barth et al., 2008). Furthermore, some proponents also maintain that since IFRS relies on a principles-based system, it is more likely to deter fraud (Carmona and Trombetta, 2008). Opponents suggest that requiring U.S. firms to adopt IFRS will be costly and that the benefits of comparability may not be realized due to disparities in the application of IFRS across countries (Ciesielski, 2007; FFSA and AFG, 2007; Herz, 2007; Soderstrom and Sun,2007; Turner, 2007; Holthausen, 2009; Sunder, 2009; Kvaal and Nobes, 2010; Hail et al., 2010, forthcoming). In addition, in 2009, SEC Chairman Mary Schapiro expressed reservations about the IASB and about the quality of IFRS (Forgeas, 2008; Cohn, 2009; Leone, 2009). More recently, Howell (2010) reports that plans for the U.S. to move to global standards are vulnerable to major delays and that chief executive officers have expressed concerns about incurring costs to convert to IFRS when the benefits of conversion are

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