| dc.description.abstract | In 2002, the Mexican Board of Financial Reporting Standards (CINIF) along with the National Banking and Securities Commission (CNBV), mandated that Mexican issuers prepare and disclose their financial information in accordance with IFRS. This situation has led Mexican economic agents (i.e., preparers, academics, auditors, analysts, and standard setters) to question whether the financial reporting quality of Mexican firms has been affected by IFRS adoption and whether this adoption has had any effect on the reporting decisions of financial executives such as controllers (or senior accountants who are responsible for financial reporting). My thesis examines these issues through three studies and contributes to the previous research on earnings management (Dechow et al. 1995; Healy and Wahlen 1999; Leuz et al. 2003; Jeanjean and Stolowy 2008; Marra et al. 2011), earnings quality (Schipper and Vincent 2003; Francis et al. 2006; Lin et al. 2006; Sun et al. 2011; Dichev et al. 2013; Dauth et al. 2017), and the effects of controllers’ interactions with corporate governance counterparts such as C-suite executives, audit committees and external auditors on misreporting behaviour (Graham et al. 2012; Wolf et al. 2015; Eskenazi et al. 2016). In Study 1, I use semi-structured interviews to gain insights into the experiences of Mexican economic agents before and after the IFRS adoption, analyse the interview narratives using accounting ecology theory (AET) as a theoretical framework and identify the costs, benefits, controversies, and challenges that Mexican economic agents encountered before and after the IFRS adoption. In Study 2, I utilize an experiment to investigate the effects of the IFRS adoption on the judgment and decision-making of preparers and contrast preparers’ reporting decisions from pre- to post- IFRS adoption. The findings of Study 2 reveal that the convergence process of the Mexican Financial Reporting Standards (MFRS) into IFRS has effectively changed preparers’ mindsets to the extent that Mexican preparers’ reporting decisions do not differ significantly between pre- (MFRS) and post- IFRS adoption, irrespective of their financial incentives or risk-preferences. These results suggest that Mexican preparers’ reporting decisions like IFRS, are principles-based. In Study 3, I use an experiment to examine the effects of organizational factors (such as audit committee expertise, audit perspective taking and close relationships with the CFO) on controllers’ misreporting behaviour. The results of Study 3 indicate that the effects of audit committee expertise and audit perspective taking on controllers’ misreporting behaviour are contingent upon the perceived high or low relationship quality with their CFOs. Collectively, this thesis contributes to prior research in three ways. First, Study 1 focuses on the framework known as accounting ecology to holistically analyse the different effects that IFRS adoption has had on the accounting profession in Mexico. Previous studies have used archival data to determine whether the Mexican IFRS adoption has brought comparability, improved accounting quality, and reduced earnings management. To my knowledge, Study 1 is the first to use a qualitative method to explore the experiences and perceptions of different Mexican economic agents regarding a change in the accounting environment. The main accounting changes identified in the interviews, which stem from the adoption of IFRS, represent different notions of what comparability means to each social actor and what it means for them to apply additional professional judgement. Second, Study 2 provides evidence on the effects that the Mexican IFRS adoption has had on preparers’ reporting decisions and contributes to the debate about professional judgement related to IFRS adoption. Third, there is a scarcity of research on how the interactions amongst corporate governance actors such as CFOs, audit committees and external auditors influence controllers’ reporting behaviour. The findings of Study 3 address this gap. | en_GB |
