IFRS Adoption and Accounting Conservatism of Japanese Firms with Governance System Transition

Konosuke Shimamoto, Fumiko Takeda

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)


This study examines whether there is a difference in the degree of accounting conservatism between firms that voluntarily adopt International Financial Reporting Standards (IFRS) and those that use local accounting standards in Japan, being a traditional code-law country that is undergoing changes in its governance system. The difference-in-difference approach reveals that the degree of conditional conservatism decreases for IFRS adopters and more sharply for Japanese accounting standards’ users between 2009/2010 and 2018/2019, resulting in relatively larger conditional conservatism for IFRS adopters. The regression analysis shows that the change in conditional conservatism is positively associated with IFRS adopters having a high foreign shareholders ratio. This study makes several contributions to the related literature. First, to the best of our knowledge, this study is the first to provide a comparative analysis of IFRS and Japanese accounting standards with respect to conservatism. Second, additional evidence is provided on the relationship between conservatism and corporate governance.

Original languageEnglish
Pages (from-to)161-173
Number of pages13
JournalInternational Advances in Economic Research
Issue number2
Publication statusPublished - 2020 May 1
Externally publishedYes


  • Conservatism
  • Corporate governance
  • Japan
  • Voluntary IFRS adoption

ASJC Scopus subject areas

  • Economics and Econometrics
  • Economics, Econometrics and Finance(all)


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