Existing cross-country studies sugg

Existing cross-country studies suggest that, because of weak legal
enforcement and investor protection, countries such as China may
not necessarily benefit from IFRS convergence. Indeed, previous
studies of the IFRS convergence effect in China have yielded
mixed and weak results. Nonetheless, contrary to this prediction,
the present study confirms that the IFRS convergence has
benefited some firms in China. As in other countries, this benefit
is not uniform but heterogeneous across firms, depending on each
firm’s reporting incentives. This is consistent with the argument in
extant accounting literature that incentives, especially capital
market incentives, influence accounting quality above and beyond
accounting standards (eg Ball et al. 2003).