Birds of a feather flock together - or do they? An empirical study of the cultural and sector-specific effects on revenue and equity due to the implementation of IFRS 15

Sammanfattning: Globalization and the international integration of markets have emphasized the need for increased accounting harmonization. IFRS 15 Revenue from Contracts with Customers was introduced for fiscal years beginning on or after 1st of January 2018, with an intention to increase comparability. This has been done by replacing previous revenue standards and establishing one revenue recognition standard for almost all types of contracts with customers. Using data from the first available quarterly and interim reports since the introduction of IFRS 15, this thesis analyses the effects on firms' reported equity and revenue for 250 firms across 4 different cultural dimensions in accordance with Gray (1988). The findings of this study show that the adoption of IFRS 15 has a more negative than positive effect on firms' equity and revenue. Furthermore, the effect on equity is shown to be different depending on culture, adding to the literature that cultural accounting patterns can still be observed, even after years of harmonization. Lastly, this thesis finds that disclosure behavior is influenced by cultural accounting traditions, which affect the choice of method when adopting IFRS 15.