While early research focused more o

While early research focused more on the value relevance of domestic and foreign
GAAPs (and reconciliations thereof), more recent studies consider the consequences of different GAAPs to investors and analysts (U.S., IFRS, or other local). Leuz (2003) investigates differences in information asymmetries of firms traded on Germany’s New Market, which can choose between international accounting standards (IAS) and U.S. GAAP for financial reporting purposes. Because these companies are from the same country and have the same listing requirements, enforcement mechanisms, and other common institutional factors,differences in information asymmetry can be more directly linked to differences in accounting standards.