Resumen de The Adoption of Internationally Recognized Accounting Standards: Implications for the Credit Markets

Joanna Shuang Wu, Xiying Zhang

• We examine whether the adoption of internationally recognized accounting standards is associated with a greater sensitivity of credit ratings to accounting information. We find that credit ratings are significantly more sensitive to the accounting default factor post voluntary International Financial Reporting Standards (IFRS)/U.S. Generally Accepted Accounting Principle (GAAP) adoption. Similar evidence is also found post mandatory IFRS adoption in countries with strong rules of law. Collectively, the above evidence suggests that firms� incentives to comply are important in determining the consequences of accounting standard changes.