ANALYSIS OF THE IMPACT OF THE CONVERGENCE PROCESS TO THE INTERNATIONAL ACCOUNTING STANDARDS IN BRAZIL: A STUDY BASED ON THE VALUE RELEVANCE OF ACCOUNTING INFORMATION

Abstract

Recently, a lot of changes in the legislation governing the Brazilian accounting practices initiated the alignment of Brazil to the internationalization process of accounting. In this context, this article aims to verify if the process of convergence to international accounting standards impacted the value relevance of accounting information such as Earnings per Share (LPA) and Equity per Share (PLPA), of the non-financial companies most traded on BM&FBOVESPA. This is done by testing the stability of regression parameters between accounting information and stock price. In this case, if the parameters of this regression, over the years 2009 and 2010, did not remain statistically stable (Chow breakpoint test), means that the convergence process to the international accounting standards (IFRS) has brought changes to the value relevance of accounting information. Therefore, this study is based on the Positive Theory of Accounting, more specifically in the context of the MBAR (Market Based Accouting Research). The results show that there was a structural break from 2009 to 2010, thus revealing the impact of the convergence process. Furthermore, the comparison between the regressions R2 for 2009 and 2010 shows that there was an increase in the explanatory power of the stock price through LPA and PLPA, which means that the accounting information became more relevant. Finally, it is observed that this increase in value relevance is supported by the increase in R2 of the LPA regression, ie, this variable was that it became more value relevant after the convergence process to international accounting standards.