First of all, this paper argues that, while empirical evidence on the role of institutional settings and firms’ incentives in shaping accounting quality is quite compelling, some caution must be shown in drawing definite conclusions on the effects of mandatory IAS/IFRS adoption on financial reporting quality. Although the literature on mandatory IAS/IFRS adoption in Europe has developed rapidly over the past years, it is still immature. In fact, extant research generally covers the period immediately subsequent to IAS/IFRS adoption in Europe, whereas it leaves the recent financial crisis out.