Mandatory IFRS adoption and executive compensation:Evidence from China

• 作者: Lanfang Wang Qingchuan Hou Qinglu Jin
• 来源期刊: 中国会计学刊：英文版
• 学科: 经济
• 关键词: IFRS ADOPTION EXECUTIVE COMPENSATION Accounting-ba
• 年，卷（期）: 2014,（1）
• 页码范围: 9-29
• 页数: 21页
• 分类号: F233

摘要

This study investigates how the mandatory adoption of International Financial Reporting Standards(IFRS) affects the contractual benefits of using accounting information to determine executive compensation in China. After controlling for firm and corporate governance characteristics, we find strong evidence supporting the positive role of mandatory IFRS adoption on the accounting-based performance sensitivity of executive compensation. Subsample analysis suggests that improvements in accounting-based performance sensitivity after IFRS adoption differ across regions with various levels of institutional quality and across firms that are affected to a different extent by the adoption. Additional analysis supports the argument that the positive effects of IFRS adoption on the use of accounting performance in executive compensation are driven by the reduction in accounting conservatism associated with IFRS adoption.