Our sample of Chinese and German firms includes some firms that are required to apply IAS. These include Chinese B share firms and German New Market firms. We perform all of our comparisons omitting these firms. None of the inferences differs from those obtained from the tabulated results. The table 1, panel A country classification includes firms from the listed country that are incorporated offshore, for example, in Bermuda, The offshore incorporation permits these firms to use IAS rather titan domestic standards. For example, four U.K. firms arc headquartered and operate in the United Kingdom, but arc incorporated in Bermuda.