The quality of published accounting information in Russia

Abstract

Since the collapse of the Soviet Union Russia has undergone a number of reforms towards developing market economy. Accounting has encountered dramatic changes over the last two decades. Despite attractive investment opportunities in Russia, investors are often faced with uncertainty, which makes it very important to explore the quality of accounting information published in Russia. The purpose of this thesis is to investigate the quality of published accounting information in Russia. The thesis consists of four essays, each of them addressing the question of the quality of accounting information published in Russia by incorporating the specific Russian institutional environment. Special attention is paid to the role of International Financial Accounting Standards (IFRS) and foreign investors. The quality of published accounting information is conceptualized by such accounting constructs as conservatism, earnings management and value relevance. This first essay investigates the earnings quality of both listed and non-listed Russian firms and explores whether foreign ownership affects the quality of earnings published by non-listed Russian firms. The second essay examines whether emphasis on international investors is associated with the adoption of or intention to adopt IFRS in Russian firms. The third essay addresses the question of IFRS and Russian Accounting Standards (RAS) accounting quality by using the methodology proposed by Barth et al. (2008) and by value relevance constructs of accounting quality. The fourth essay investigates the value relevance of firms’ integral environmental impact, i.e. a proxy for environmental performance, following the stream of non-financial information value relevance in accounting research. This thesis provides evidence that the quality of published accounting information published in Russia depends on many factors, the most influential of these being listing on the stock exchange, IFRS and foreign investors. The results of the thesis demonstrate that the institutional characteristics of the country shape accounting numbers and influence the incentives of those preparing financial statements. The findings of the thesis include information valuable for regulators and investors.

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