The Effect of Accounting Harmonization on Accounting Comparability

Jasmin Vittrup Ozeri & Rebeka Juhasz

Student thesis: Master thesis


This master’s thesis studies how accounting harmonization affects the accounting comparability of European firms. The event of mandatory IFRS adoption in 2005 is used as a defining point in accounting harmonization, while the accuracy of relative valuation is used as proxy for accounting comparability. The approaches of difference-in-difference and propensity score matching (PSM) are applied to study the impact of accounting harmonization. We study the sample period of 2003–2006 where we apply the three multiples enterprise value-to-sales, price-toearnings, and market-to-book to measure valuation accuracy. Moreover, we implement four control groups: 1) voluntary IFRS/IAS adopters, 2) non-IFRS adopters, 3) PSM non-IFRS adopters, and 4) industry-based mandatory IFRS adopters to isolate the effect of mandatory IFRS adoption. The empirical results of this research suggest that accounting harmonization, when assessed through the event of mandatory IFRS adoption, has an effect on accounting comparability. However, due to the contradicting results, the findings of this thesis should be interpreted with cautio

EducationsMSc in Accounting, Strategy and Control, (Graduate Programme) Final Thesis
Publication date2020
Number of pages126
SupervisorsJeppe Christoffersen