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Academics: Move to IFRS Won't Boost Reporting Quality

Tammy Whitehouse | July 15, 2009

A group of academics offer some new food for thought in the ongoing debate of when and how to transition the United States to international accounting standards. The professors say the upfront cost of transition won’t necessarily be recouped in lower cost of capital or improved capital allocation because the United States has plenty of other factors at play that already produce high-quality reporting.

Wysocki“We’re not disputing the fact that high-quality, comparable financial reporting practices can have capital market benefits,” said co-author Peter Wysocki, a professor at the Massachusetts Institute of Technology who is transitioning to the University of Miami. “The net effect for a given company in the United States is less obvious.”

The authors, including...

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