Irrespective of whether the primary role of financial reports is as a timely source of new information
for external investors or as a means of monitoring and enforcing contractual relationships,
there is still an overriding concern with financial reporting quality. One frequent justification then for IFRS that is applicable from either perspective is that international harmonization will result in
higher quality financial reporting. However, while there are several studies that examine the quality
of financial reporting after the adoption of IFRS, the results are somewhat mixed. Moreover, there
are many different empirical constructs, some of which reflect attributes of the accounting numbers
themselves (e.g., accrual based measures of manipulation) and some of which reflect the interaction
between accounting information and capital markets (e.g., measures of value relevance).8 In addition,
there is the issue of whether adoption of IFRS (or for that matter US GAAP) is voluntary or
mandatory.