■ 国際会計研究学会 年報 2014 年度 第 1 号

The Impact of IFRS Adopter on Effective Tax
Rates in Korea: Analysis of Consolidated
Financial Statements
Jeong Ho Kim
Silla University

Jeong Kyo Kim
Pusan National University

Abstract
As the Korean International Financial Reporting Standards (IFRS)
are being adopted from 2011 onwards in Korea, all listed firms andmost financial institutions must use the IFRS standard for theirfinancial reporting. This new economic environment createdconfusion and uncertainty for Korean companies as the rules applied
by IFRS differs greatly to that of the Korean Generally Accepted
Accounting Principles (K-GAAP). Despite economic substanceremaining unchanged, the potential changes in tax expense andeffective tax rates has become of great concern to the firms planningto adopt IFRS. Accordingly, this study examines whether adopters of
IFRS has been impacted in any significant ways by the changes in tax
expense and effective tax rates under IFRS as compared to theprevious system of K-GAAP.
For those firms that have adopted IFRS in 2011, this case study
examines 600 of KOSPI (Korean Composite Stock Price Index) and
KOSDAQ (Korean Securities Dealers Automated Quotations) firms.
These firms have reported financial statements for both IFRS andK-GAAP in 2010, due to the gradual shift from one accounting
standard, K-GAAP, to another, IFRS. The firms that have adopted
IFRS in 2011 were required by the financial supervisory service of
Korea to restate their 2010 financial statements using IFRS anddisclose the reconciliation of the differences between the two sets ofaccounting standards. Thus, even when economic substance remains
unchanged among these firms, it has enabled us to conduct a
comparative analysis on tax expense.
The main results for adopters of IFRS for the 2010 fiscal year are as
follows: First, a majority of adopters of IFRS have decreased effective
tax rates as compared to K-GAAP. Second, a majority of adopters of
IFRS have effectively experienced an decrease in tax expense ascompared to K-GAAP. Third, there are strong indicators that show amajority of adopters of IFRS have effectively increased their income
or loss before income taxes and net profit as compared to K-GAAP.
127

Finally, for these firms, there exists a difference in results between
firms on the KOSPI and KOSDAQ. KOSPI firms exhibit similar
results as compared to the outcome of the total number of firms(TOTAL=600 firms) used for analysis, but KOSDAQ firms show
differences with this total.
These results contribute to research about how firms are affectedby the changes to accounting standards on tax expense and effective
tax rates. Also these results contribute to research about how firms
are affected by the changes to accounting standards as segregatedby KOSPI firms and KOSDAQ firms.

Key Words: IFRS, K-GAAP, tax expense, Effective Tax Rates
firms would undoubtedly incur additional

Ⅰ. Introduction

burdens, like time and costs and extra

As the International Financial Reporting

momentary costs, with the implementation

Standards (IFRS) is being adopted from 2011of new standards. However, Korean firms

in Korea, all listed firms and most financial

stand to gain more than lose with theinstitutions must use the IFRS standard in

adoption of IFRS, as the reliability andtheir financial reporting. A radical change ofcredibility of Korean firm’s financial improvetheaffectsstatements as this shift creates unity incorporate accounting information quality.

accounting practices in multiple countries

For instance, the decision making process ofthroughout the world. The simplification to

any corporation's interested parties areinternationally accepted standards has also

influenced by the quality of the accounting

made it easier for overseas investors to

information. Therefore, it can affect thepositive in investment opportunities inaccounts of capital finance and investment

Korea through greater transparency.

accounting

environment

activity as well as tax expense and effective

Previous studies in the EU on the

tax rates (ETR). While previous researchers

economic impacts of changing accounting

were interested in tax expense and how it

standards mostly presented their view ofaffects the size of firms, capital structure,

how adopters of IFRS were affected inand profitability, this paper focuses on how

regards to the quality of their accounting

the changing accounting standards frominformation (Barth et al. 2008; Balsari et al.

Korean2010; Devalle et al. 2010) On the other hand,

Generally

Principles

Accepted(K-GAAP)to

Accounting

IFRS

affects

most previous research in Korea presented

corporate tax expense and ETR on their

their view of how adopters of IFRS werebusiness.

affected as well but most of this research was

Unfortunately, for the short term during
the transition period from K-GAAP to IFRS,
128

limited in scope or scale using very narrowcase studies or specific industries.

The Impact of IFRS Adopter on Effective Tax Rates in Korea

Therefore,

this

paper

analyzes

twotaxed. For corporations, the effective tax rate

different financial standards (K-GAAP and

is computed by dividing total tax expenses by

IFRS) reported for the same year (2010) andthethe exact same firms with a specific focus oneffective tax rate is the net rate a taxpayer

tax expense and ETR. Normally, financepays if all forms of taxes are included andstatements draw upon information from both

divided by taxable income.

the current year and the previous year for

firm'searnings

beforetaxes.

The

Spooner (1986) discusses the different

comparison. Korea adopted IFRS in 2011.

methodologies

Consequently, a great opportunity aroseeffective tax rates from financial statements.

from this switch from K-GAAP to IFRS for

Effective tax rates can be divided into two

the 2010 fiscal year. This is because financial

broad classifications: average effective tax

reports were made for both K-GAAP and

rates and marginal effective tax rates. The

IFRS for 2010 fiscal year. This paper

first are generally defined as the amount ofresearches on how the changing accounting

tax paid as a percentage of income. The

standards from K-GAAP to IFRS affects

marginal tax rate is the percentage of thecorporate tax expense and ETR on their

expected return on an additional investment

business.

that is expected to be paid in tax. Tax rates

formeasuring

average

The remainder of the paper is organized as

may be calculated by comparing threefollows: Section 2 reviews previous studies

different measures of taxes paid with bookon the measurements of ETR and the effects

income:of IFRS. Section 3 explains the research

represents taxes expected to be currently

design and sample selection. Section 4

payable; the total provision for taxes, which

discusses the empirical results. Finally,

represents the taxes payable on that year's

section 5 concludes.

book income in the current year or in thecurrent

tax

expense,which

future; or current taxes plus some portion ofdeferred

Ⅱ. Advanced Research

information

ETR
the

the

relative

illustratevaluableaccumulationofconsequences

of

tax

Averagebenefits.

theeffective tax rates may capture not only theefficiency of an enterprise’s activity and its

details of specific tax provisions but also theburdenchanging role of those provisions over time.

taxation.

effectiveness

the

and

of

on

providesMeasuringeffective tax rates of industries serves to

2.1 ETR Measurement
Generally,taxes.

Previous

researchstudied the measuring factors of various

Meanwhile

ETR in relation to business activities,

appropriate for measuring the incentives ininvesting activities, financing activities, anda tax system. From this point of view theso on. The ETR for a corporation is themeasures may be complementary rather

average rate at which its pre-tax profits arethanmarginal

competitive.

rates

Omer

et

are

al.

more

(1991)
129investigates two issues relating to the use of

Accounting Standards is associated with

ETRs:

defensible

higher accounting quality. The result shows

alternative measures to provide different

that 21 countries generally evidence lessresults and the problems associated withearningusing financial statement information to

relevance of accounting amounts in relation

estimate tax and income. Results indicate

with sample firms applying a non-U.S.

that

and

domestic standard. Balsari et al. (2010) is

systematic deferred tax reporting differences

considering the need for understanding thein the financial statements cause notableeconomic consequences of harmonization,

shifts in estimated ETRs. The systematicthey investigate the impact of IFRS adoption

deferred tax differences have a predictableon the earnings conservatism as a dimension

directional effect on estimated ETRs.

of reporting quality in Turkey. The results ofthepotential

alternative

ETR

for

measuresmanagement,

and

more

value

On the other hand, Gupta and Newberry

the study show that IFRS adoption has(1997) examines the determinants of theincreased both the timeliness and earnings

variability in corporate effective tax rates.

conservatism (asymmetric timeliness), while

The results suggest that ETRs are associatedthe impact is stronger for financial firms, forwith many firm-specific characteristics such

firms having lower debt levels, and foras size, capital structure, asset mix, andsmaller firms. Devalle et al. (2010) states the

profitability. Moreover, the finding that the

adoption of IFRS in the EU created mixed

fixed-effects regression model provides a

results

intheaccounting

superior specification over a simple-pooledindividualEUnations

model

other

experiencing improved accounting quality,

unobserved firm-specific factors have an

while others worsened. Case in point,

important and nontrivial relation with ETRs,

Britain, Germany, and France benefitted

and that these unobserved variables arefrom the change to IFRS with increased

likely correlated with the included variables.

stock prices. However, with the exception of

Thus,

and

Britain, most countries experienced net

time-series tests of an association between

asset decreases. Tendeloo and Vanstraelen

ETRs and other variables of interest are(2005)

biased and inconsistent.

companies that have adopted IFRS engage

indicates

standard

thatcertaincross-sectional

investigate

qualitywithwhetherofsomeGermansignificantly less in earnings management

2.2 Effects of IFRS

compared to German companies reporting

Recently, the focus of much research is on

under

Germangenerally

accepted

the quality of accounting practice andaccounting

information and whether or not it hascontrolling for other differences in earnings

improved. Barth et al. (2008) examines

management incentives. The results suggest

whether the application of Internationalthat IFRS-adopters do not present different

130

principles(GAAP),

while

The Impact of IFRS Adopter on Effective Tax Rates in Korea

earnings management behavior compared tostudied the early adoption of IFRS bycompanies reporting under German GAAP.

Korean firms and its effects on corporate tax

These findings contribute to the current

expense. Their analysis shows decreases indebate on whether high quality standards

tax expense from K-GAAP to IFRS, but, inare sufficient and effective in countries withtotal, only 12 Korean firms were sampled.

weak

They

Previous research done in Korea was limited

indicate that voluntary adopters of IFRS into very narrow case studies or specificGermany cannot be associated with lower

industries.

investorprotection

rights.

Thisearnings management.
Analysisof

thisprevious

researchpaperchanging

researches

accounting

on

how

standards

the
from

demonstrates that the overall quality of

K-GAAP to IFRS affect 600 corporations

information

the(KOSPI firms and KOSDAQ firms) which

implementation of IFRS in the EU, withadopted IFRS. Analysis concentrates on

research both registering improving andcorporate tax expense and ETR on theirworsening quality. Before the switch tobusiness in 2010.

isinconclusive

after

IFRS, both the accounting standards andaccounting environment were expected toundergo comprehensive change. With this inmind,

policymakersandacademic

researchers were anticipating what these

Ⅲ. Research Design
3.1 Model
Alllisted

firms

and

most

financialchanges meant and how it would affectinstitutions must use the IFRS standard in

Korea. There were two parts to these

their financial reporting after 2011. This

expectations and concerns. The first partpaper studies ETR and measures different

was to pinpoint potential problem areas andtypes of ETR.

develop viable solutions. Special attention

The first measure of ETR 1 is current tax

was put on critical segments of the economy

expense over income or loss before incomethat would be affected the most, such as

taxes.

financial, insurance, and construction firms.

ETR 1 = tax expense / income or loss before

The second part was concerned about theincome taxes

quality of the information presented by firms
and the related issues of taxation.
The study by Kyu-Ho Kim (2008) focusedon financial institutions and the effects ofswitching

to

IFRS, specifically

on

the

allowance of bad debts and insurance. The
results demonstrate increases in earning
management. Woon-Oh Jung et al. (2011)131

before 20082009-2010

after 2011

early adopter of IFRS

IFRS

listed company

K-GAAP

unlisted company

The next measures of ETR 2 and ETR 3

accounting standards from K-GAAP to IFRS

are current tax expense over different types

affects the final sample of 600 firmsof cash flows. Generally speaking, there are

regarding their tax expense and ETR on

three divisions to cash flow: 1) net profit plus

their business in 2010. A further break down

depreciation or NIPD; 2) working capital

reveals that out of 600 corporations used infrom operation or WCFO; and 3) cash flow

this analysis, 362 are KOSPI firms and 238

from operation or CFO (Jeong-Kyo Kim

are KOSDAQ firms.

1994). This research uses measures of NIPD
and CFO.
ETR 2 = tax expense / (net profit +Ⅳ. Empirical Results
4.1 Descriptive Statistics

depreciation cost)
ETR 3 = tax expense / cash flow from

<Table 1> presents descriptive statistics of
600 firms on all variables used in theoperations

analysis herein segregated as tax expense,

3.2 Sample Selection

income or loss before income taxes, netofprofit, and ETR. As shown in <Table 1>, thestatistical data selection. In the first step,mean (median) of the tax expense for IFRS

data on firms were collected through theare 15.3978 (15.3026), while under K-GAAP,

FnGuide program offered by Financial andthis tax expense are 15.4523 (15.2349). Next,

Guide Co. The total collected data comprised

in regards to income or loss before incomeof 1,734 firms for the 2010 fiscal year. The

taxes, the IFRS mean (median) are 17.0562

second step entailed further refinement of(16.7659). However, under K-GAAP, thethe data due to incomplete data of firms, butmean (median) comes out to be 17.0414

also of firms reporting zero or negative book(16.7560). Furthermore, the net profit underincome or tax expense. As a result, a total of

IFRS comes to a mean (median) of 16.8202

1,000 out of 1,734 firms were cut out from

(16.5806) with K-GAAP of 16.7831 (16.5550).

this selection process. A final data selection

Finally, ETR 1 of IFRS has a mean

process post-data analysis was used to trim

(median) of 0.2340 (0.2266), with K-GAAP atoutlier

0.2468This

researchdata.

follows

With

the

a

process

applicationof(0.2357).

Moving

onto

ETR

2,

winsorization, an additional 134 firms wereanalysis shows that the IFRS mean (median)taken out of the 600 firms used. All in all,are 0.2727 (0.2623) and K-GAAP are 0.2892

this paper researches on how the changing(0.2762).

132

Asdemonstrated,

there

is

The Impact of IFRS Adopter on Effective Tax Rates in Korea

symmetrical distribution for ETR 1 and ETR

Here, the mean (median) for ETR 3 of IFRS

2. Also, ETR 3 has symmetrical distribution

are 0.2427 (0.2074) and K-GAAP are 0.2399

since the data shows that the normal(0.2007).

distribution curve has shifted to the right.
<Table 1> Descriptive Statistics
FactorMean

Std. Dev

1Q

Median

3Q

Min

Max

IFRS

15.3978

1.949114.0284

15.3026

16.61429.040521.8808

K-GAAP

15.45232.024514.0890

15.3249

16.69856.829821.8808

earnings before

IFRS

17.05621.824615.8230

16.7659

18.110711.2848

23.6849

taxes

K-GAAP

17.04141.879415.8390

16.7560

18.1553

9.268923.6849

IFRS

16.8202

1.862215.6489

16.5806

17.8565

11.2126

23.5050

K-GAAP

16.78311.880315.6053

16.5550

17.90029.268923.505010.23400.12730.16550.2266

0.27410.00030.9511

2

0.27270.16620.16930.26230.33610.00010.98573

0.24270.19310.10100.20740.31870.0006

0.985510.24680.12940.17960.23570.28560.00030.93642

0.28920.16170.18490.27620.35710.0001

0.9223

3

0.23990.18990.09780.20070.32240.0007

0.9466

tax expense

net profit

IFRS
ETR
K-GAAP

Note 1) The factors are measured with the natural logarithm of the real data (Base: 100 million KRW)
2) winsorization used
3) ETR 1 = tax expense / income and loss before income taxes,
ETR 2 = tax expense / (net profit + depreciation cost),
ETR 3 = tax expense / cash flow from operations

4.2 Difference of Tax Expense
K-GAAP vs. IFRS

t-test. Using the KOSPI data (362 firms), tax<Table 2> presents the comparison of tax

significance at the 1% level of the t-test atexpense between the pre- and post- adoption

4.200 (p-value=0.000). Yields significance forof IFRS. This is represented in three parts as

the t-test. On the other hand, results for

TOTAL, KOSPI, and KOSDAQ listed firms

KOSDAQ (238 firms) on tax expense forwith a further differentiation for K-GAAP

K-GAAP and IFRS yields no significance for

and IFRS. Looking at the TOTAL (600the t-test.

expensefor

K-GAAP

and

IFRS

show

firms), the tax expense for K-GAAP and

Case of TOTAL and KOSPI, tax expense of

IFRS are 15.4523 and 15.3978, respectively,

IFRS are decrease compared tax expense ofwhich demonstrates significance for the

K-GAAP, show significance at the 5% level of133

<Table 2> Difference of Tax Expense K-GAAP vs. IFRS
CLASSIFICATIONMEAN
K-GAAP

TOTAL(N=600)
KOSPI

tax expense

DIFFERENCE

t(p-value)

15.4523

IFRS

15.3978

K-GAAP

16.27542.158

0.0545(0.031)4.200

0.1213(N=362)KOSDAQ

IFRS

16.1541

K-GAAP

14.1662(0.000)-1.039-0.0492(N=238)IFRS(0.300)14.2154

the t-test at 2.158 (p-value=0.031) and at theshows significance at the 5% level for the1%

t-test at -2.475 (p-value=0.014)

level

of

the

t-testat

4.200(p-value=0.000), the reason is offset to effectequitymethodoroffsettoeffectinter-corporate of group firms.

On the other hand, Net profit comprises as
thesecondfactorforbookincome.

Consequently, the net profit for TOTAL has
K-GAAP at 16.7831 and IFRS at 16.8201.

4.3 Difference of Book Income
K-GAAP vs. IFRS

With

<Table 3> presents the comparison of book

KOSDAQ data for net profit also showsincome between the pre- and post- adoption

significance for the t-test with K-GAAP atof IFRS. Focusing on income or loss before

15.6736 and IFRS at 15.7729. Significance isincome taxes (earnings before taxes), again

at the 5% level for the t-test at -2.182

the analysis is split into TOTAL, KOSPI,(p-value=0.030). But KOSPI, the K-GAAPand KOSDAQ listed firms for K-GAAP andand IFRS of net profit are 17.4407 and

IFRS. Beginning with the TOTAL, the mean

17.4404, respectively. In this case, there isfor earnings before taxes of both K-GAAPno significance t-test.

and

IFRS

are

17.0414andsignificance17.0562,

respectively, representing no significance forthe t-test. For KOSPI, the t-test does show
no significance with the mean of K-GAAP at
17.6960 and IFRS at 17.6569. However,
there

is

yet

furthersignificancewith

KOSDAQ. With K-GAAP at 15.9162 andIFRS at 16.0208, the earning before taxes
134

this

in

mind,

with

the

analysist-test.

shows

Likewise,

The Impact of IFRS Adopter on Effective Tax Rates in Korea<Table 3> Difference of Book Income K-GAAP vs. IFRS
CLASSIFICATION

MEAN

TOTAL

K-GAAP

17.0414(N=593)

IFRS

17.0562

earning before

KOSPI

K-GAAP

17.6960

tax(N=367)

IFRS

17.6569

KOSDAQ

K-GAAP

15.9162(N=226)

IFRS

16.0208TOTAL

K-GAAP

16.7831(N=589)IFRS

16.8201KOSPI

K-GAAP

17.4407(N=363)

IFRS

17.4404

K-GAAP

15.6736

net profit

KOSDAQ(N=226)

DIFFERENCE-0.01480.0391-0.1046-0.0370.0003-0.0993t(p-value)-0.657(0.511)1.481(0.139)-2.475(0.014)-1.683(0.093)0.011(0.991)-2.182(0.030)

4.4 Difference of ETR K-GAAP vs.
IFRSof K-GAAP at a mean of 0.2582 and IFRS at<Table 4> presents the comparison of ETRB〉ETR 2 for K-GAAP and IFRS are 0.3101

before and after the adoption of IFRS; theand 0.2825, the means are 0.2575 forthree parts being TOTAL (Panel A), KOSPIK-GAAP and 0.2579 for IFRS ETR 3.

(Panel B), and KOSDAQ (Panel C) listed

Analysis shows that for the instances of ETR

firms. Consequently, each panel is further

1 and ETR 2, there is significance at the 1%

divided into ETR 1, ETR 2, and ETR 3.

level of the t-test only. Finally, in reference

Referring to <Table 4, Panel A>, ETR 1 of

to <Table 4, Panel C>, all data like TOTAL,TOTAL consists of K-GAAP at a mean of

KOSPI and KOSDAQ shows no significance0.2468 and IFRS at 0.2340. Moving further

t-test.

0.2440. Moving further down <Table 4, Panel

down <Table 4, Panel A> ETR 2 for K-GAAP
and IFRS are 0.2892 and 0.2727, the means
are 0.2400 for K-GAAP and 0.2427 for IFRSETR 3. Analysis shows that for the instancesof ETR 1 and ETR 2, there is significancewith the data for the t-test only. Looking at<Table 4, Panel B>, ETR 1 of TOTAL consists
135

<Table 4> Difference of ETR K-GAAP vs. IFRS
Panel TOTALCLASSIFICATION

MEAN

ETR 1

K-GAAP(N=562)

IFRS

0.2340ETR 2

K-GAAP

0.2892(N=536)IFRS

0.2727ETR 3

K-GAAP

0.2400(N=441)IFRSDIFFERENCE

0.24680.01280.0165-0.0027
0.2427t(p-value)
2.980(0.003)3.129(0.002)-0.355(0.723)

Panel B KOSPICLASSIFICATION

MEAN

ETR 1

K-GAAP(N=347)IFRS

0.2440ETR 2

K-GAAP

0.3101(N=333)

IFRS

0.2825ETR 3

K-GAAP

0.2575(N=263)IFRS

DIFFERENCE

0.25820.01420.0276-0.0004
0.2579t(p-value)
2.806(0.005)4.369(0.000)-0.041(0.967)

Panel C KOSDAQ
CLASSIFICATION

136

MEAN

ETR 1

K-GAAP

0.2309(N=215)IFRS

0.2204ETR 2

K-GAAP

0.2563(N=203)IFRS

0.2593ETR 3K-GAAP

0.2095(N=178)IFRS

0.2165

DIFFERENCE
0.0105-0.003-0.007t(p-value)
1.302(0.194)-0.314(0.753)-0.615(0.539)

The Impact of IFRS Adopter on Effective Tax Rates in Korea

accounting practices in multiple countries

Ⅴ. Conclusions

throughout the world. The simplification to

The Financial Supervisory Service of
Korea

financial

made it easier for overseas investors toauthority, began implementing a public

positive in investment opportunities inprocess for the gradual adoption of IFRS in

Korea through greater transparency.

Korea.

(FSS),

Aagovernment

internationally accepted standards has also

Roadmap

and

For those firms that have adopted IFRS in

officially announced on March 15, 2007. We

2011, this case study examines 600 of KOSPI

call it IFRS which will start to implement

and KOSDAQ firms. These firms havefrom 2011. As the IFRS are being adopted

reported financial statements for both IFRS

from 2011 onwards in Korea, all listed firms

and K-GAAP in 2010, due to the gradualand most financial institutions must use theshift

IFRS standard for their financial reporting.

K-GAAP, to another, IFRS. The firms that

This new economic environment createdhave adopted IFRS in 2011 were required by

confusion

Koreanthe financial supervisory services of Korea tocompanies as the rules applied by IFRS

restate their 2010 financial statements using

differs greatly to that of K-GAAP. Despite

IFRS and disclose the reconciliation of theeconomic substance remaining unchanged,

differences

the potential changes in tax expense andaccounting standards. Thus, even wheneffective tax rates has become of great

economic

concern to the firms planning to adopt IFRS.

among these firms, it has enabled us to

Accordingly, this study examines whether

conduct a comparative analysis on tax

adopters of IFRS has been impacted in any

expense and effective tax rates as caused bysignificant ways by the changes in tax

theexpense and effective tax rates under IFRS

standards in areas such as corporate tax.

and

was

uncertainty

outlinedforas compared to the previous system of
K-GAAP.

from

two

one

accounting

betweensubstance

different

the

two

remainssets

ofstandard,

sets

of

unchanged

accounting

The main results for adopters of IFRS forthe 2010 fiscal year are as follows: First, a

Unfortunately, for the short term during

majority of adopters of IFRS have decreased

the transition period from K-GAAP to IFRS,

effective tax rates as compared to K-GAAP.

firms would undoubtedly incur additional

Second, a majority of adopters of IFRS haveburdens, like time and costs and extra

effectively experienced an decrease in tax

momentary costs, with the implementation

expense as compared to K-GAAP. Third,of new standards. However, Korean firms

there are strong indicators that show astand to gain more than lose with the

majority of adopters of IFRS have effectively

adoption of IFRS, as the reliability andincreased their income or loss before income

credibility of Korean firm’s financial improvetaxes and net profit as compared to K-GAAP.

statements as this shift creates unity in

Finally, for these firms, there exists a137

difference in results between firms on the
KOSPI and KOSDAQ. KOSPI firms exhibit
similar results as compared to the outcomeof the total number of firms (TOTAL=600
firms) used for analysis, but KOSPI firms
show differences with this total.
These results contribute to research about
how firms are affected by the changes toaccounting standards on tax expense andeffective

tax

rates.

Also

these

results

contribute to research about how firms areaffected by the changes to accounting
standards as segregated by KOSPI firms and
KOSDAQ firms.
References
Balsari, C. K., S. Ozkan, and M. G. Durak,“Earnings conservatism in the pre- andpost-adoption period in Turkey: Panel data
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Accounting and Management
Systems, 2010, pp.403-421.

Information

Barth, M. E., W. R. Landsman, and M. H. Lang,“International accounting standards andaccounting quality”, Journal of Accounting
Research Vol. 46 No. 3, 2008, pp.467-498.

138

Devalle, A., R. Magarini, and E. Onali, “Assessing
the value relevance of accounting data theinternational of IFRS in Europe”, Working
Paper, University of Turin, 2010.
Gupta, S. and K. Newberry, “Determinants of thevariability in corporate effective tax rates:
Evidence from longitudinal data”, Journal of
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