Paper Title
The Influence Of IFRS Adoption On The Role Of Financial Reporting As A Tool For Evaluating Capital Investment Efficiency

Abstract
This paper investigates the association between financial reporting quality and firmsí internal capital investment efficiency, and how the financial reporting-investment efficiency association is affected by the implementation of IFRS in three European Union member states. Using a sample of publicly traded firms in Germany, the United Kingdom and the Netherlands from 2000 to 2012, this paper shows a positively significant relation between financial reporting quality and investment efficiency among the three countries. These results are consistent with the idea that higher quality external reporting serves a role in improving corporate decision making in terms of firmsí internal investments. However, considerable differences in terms of the effect of reporting quality on investment efficiency are found across Germany and the UK. The findings also indicate cross-country differences in terms of the effect of financial reporting quality on internal investment efficiency after IFRS implemen-tation. More specifi¨cally, the evidence suggests that reporting under IFRS leads to more efficient internal investments among German firms, while causing a reduction in the efficiency of investments in the United Kingdom. The tests fail to provide any clear evidence about the influence of IFRS reporting on capital investment decisions in the Netherlands. Keywords- Financial reporting quality, internal capital investment efficiency, IFRS, Germany, the United Kingdom, the Netherlands.