The Effect of International Financial Reporting Standards Adoption on Credit Markets: Do User Incentives Make a Difference?
Abstract
ABSTRACT User incentives influence decision‐making in credit markets; however, the influence of incentives on the credit relevance of International Financial Reporting Standards (IFRS) remains unexplored. This study examines how competition among credit rating agencies in Japan, where firms can choose between single or multiple ratings when issuing bonds, shapes their incentives. The findings reveal that competition‐driven incentives to build and maintain reputational capital enhance agencies' efforts to gather, process, and effectively use IFRS data. This study highlights the role of user incentives, particularly those arising from competition, in shaping the impact of IFRS adoption on credit markets.
Fields of Study & Subjects
Auditing
Earnings Management
Governance
Credit Risk and Financial Regulations
Financial Distress and Bankruptcy Prediction
Publication details
- Journal / source
- Accounting and Finance
- Volume
- 66
- Issue
- 3
- Pages
- 2179–2207
- Publication date
- 8 January 2026
- Language
- EN