enforcement and disclusure

Firm incentives, institutional complexity and the
quality of “harmonized” accounting numbers
This study is going to be based in the fact of how firm reporting incentives and institutional factors affect accounting quality in firms from 26 countries. With this analysis they can help to clarify previously non-conclusive evidence according to which accounting quality is determinate by firmsincentives and institutional condition.
Owing to the difficult to observe and measure the accounting quality the researches depend on the two following measures generally accepted in previous accounting research:
1. The first one is a measure based on the market that held the relation between stock returns and accounting earnings
2. The second measure depend on accounting numbers which is goingto identity the relation between accruals and cash-flow
As I have told at the beginning the sample comprises firms (7.854) from 26 countries for the period among between 2006/2007.
And the main overcomes the find are that accounting quality is positively associated with ownership structure, audit fees, external financing needs, analyst scrutiny and leverage. Regarding the country level thisstudy indicates firms which are domiciled in countries with higher levels of economic and institutional development display better quality financial reporting.
These results have some practical economic repercussions since firm-specific incentives reflect a significant part of institutional and economic conditions. So, the international efforts by FASB and IASB to improve accounting standardsworldwide are expected to result in more comparable and transparent reporting. On balance this international firms have adopted IFRS accounting standards in order to harmonize it, after which is supposed to increase the expectation that reporting quality will rise across jurisdiction and will lead to more consistent and reliable results. In contrast, some institutional factor are known to affectfinancial reporting quality regarding the country level, such as: the quality of the legal system, the effectiveness of enforcement mechanism...
Coupled with the commented before to explain financial reporting quality in a international content they have considered a variety of firm-level reporting incentives like: international business diversification, ownership concentration, transparency ofdisclosure, etc.
Afterwards, once the researches have explained us the way they are going to follow to research the investigation's findings, they build a model which mainly implication we can see in the following table:



This table present the effects of firm incentives and countrywide institutional factors on accounting quality. Now, we are going to see the main implication this tablehas.
Colum 3 and 4 report the individual influence of firm-level incentives on accounting quality, for example: firms listened in US markets have higher quality accounting numbers, or that analysis activity has a positive relation with accounting quality
Colum 5 and 6 shown the results regarding the individual influence of country institutional factors on accounting quality, for example, we cansee a positive significant coefficient on GLOBAL that confirms the argument that accounting quality in higher in countries well integrate into global markets.
Colum 7 and 8 shown the empirical results for the mixed firm and county-factor models.
In conclusion this analysis obtain the result that financial reporting quality increases in the present of strong supervision mechanism by meansownership concentration, analyst scrutiny, effective auditing, external financial needs and leverage. Regarding the with the country level, they observe better accounting quality for firms from regulatory environments with stronger institutions, higher levels of economic development, greater business sophistication, and more globalized markets .
El control institucional de la información financiera:...