ORCID Identifier(s)


Graduation Semester and Year




Document Type


Degree Name

Doctor of Philosophy in Accounting



First Advisor

Martin Taylor

Second Advisor

Li-chin Ho


The rise of International Financial Reporting Standards (IFRS) as a contender to be the single globally-accepted set of accounting standards has been accompanied by a wealth of research studying the consequences of IFRS adoption. However, prior research does little to address the potential effects of and market sentiment toward the use of IFRS rather than U.S. GAAP in the United States. This study fills this gap by examining the accounting standard choices of foreign private issuers in the United States. In addition to identifying the factors that are associated with a firm's accounting standard choice in the U.S., this study addresses the capital market reaction to this choice by comparing the value relevance of U.S. GAAP and IFRS financial statements and the trading volume reaction surrounding earnings announcements. Several firm characteristics prove to be significantly related to firms' accounting standard choices in the United States, supporting the idea that firms choosing IFRS or U.S. GAAP are making this decision based on relative costs and benefits. Larger firms that are listed on more exchanges are more likely to use IFRS. Firms are also more likely to use IFRS in the United States when they are required to use IFRS in their country of incorporation. Several other factors are related to accounting standard choice to a lesser extent. Results suggest that the different accounting standards used by these firms is associated with the market reaction to their accounting information. While book value and operating cash flows appear to be more value relevant under U.S. GAAP, earnings are more value relevant under IFRS. Additionally, IFRS financial statements appear to be more value relevant as a whole for foreign private issuers. However, additional tests suggest that these differences in value relevance may be driven by firm characteristics other than accounting standard choice. A firm's accounting standards are also related to the market reaction surrounding the earnings announcement, with firms using IFRS experiencing less abnormal trading volume. Once again, the possibility that these differences in trading volume could be related to other firm characteristics cannot be ruled out. Taken together, the results suggest that IFRS may be just as useful as U.S. GAAP to investors in the United States, if not more so, for foreign private issuers.


IFRS, Value relevance, Trading volume


Accounting | Business


Degree granted by The University of Texas at Arlington

Included in

Accounting Commons