Study on the Relationship between the Normalised Accounting Model and Financial Risk
Keywords:
IFRS; accounting model; financial risks; financial statements; fair vakue; sensitivity analysisAbstract
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 decisionmaking
processes and risk management thereby increasing the managers’ concern about the predictive value of the
financial statements3
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