Does culture still matter post-IFRS?

Purpose This study aims to examine the impact of culture on earnings management after changing to International Financial Reporting Standards (IFRS). Design/methodology/approach The study’s sample selection comprises all publicly listed firms in 25 countries between 2000 and 2017 from DataStream database with cultural dimensions ratings from Hofstede et al. (2010). The initial sample contained 2,451 firms. Findings This study provides evidence that the interaction between national culture and IFRS adoption remains influential in explaining differences in the magnitude of earnings management behavior across countries. Originality/value This study higlights how IFRS and the cultural values interact with each other and affect earnings quality. In particular, the authors provide evidence on the relationship between individualism, uncertainty avoidance, power distance and masculinity of national culture and earnings management and, primarily, find that national culture significantly influences the decisions of managers after adopting IFRS.