EIRP Proceedings, Vol 15, No 1 (2020)

Study on the Relationship between the Normalised Accounting Model and Financial Risk

Cristian Florin Gheorghe

Abstract


The adoption of International Financial Reporting Standards in 2005 by listed European firms, and accompanied by similar regulatory action across the globe, represents one of the most influential changes of accounting rules in the history. The transition from a set of own accounting principles to a single common set of accounting standards has affected thousands of companies that differ in terms of size, management structure, capital structure, culture, legal environment and other characteristics2. These changes had a great influence on decision-making processes and risk management thereby increasing the managers’ concern about the predictive value of the financial statements.

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