Standard relationship between execution markers indicators of Brazil, US and IFRS bookkeeping models of Brazilian and United Kingdom organizations

Abstract

The aim of the article is to identify canonical correlations among performance indicators calculated from
a base of accounting statements prepared in accordance with United States Generally Accepted
Accounting Principles (US GAAP), Brazilian accounting standards (BR GAAP) and International
Financial Reporting Standards (IFRS). Descriptive research with a quantitative approach was carried out.
A research sample of 50 companies was selected, including 17 Brazilian companies listed on the
Bovespa’s Board of Corporate Governance and 33 English companies listed on the London Stock
Exchange, all of which trade American Depositary Receipts on the New York Stock Exchange. The
results demonstrate divergence between companies and indicators in relation to differences calculated
in performance indicators as well as statistically significant canonical correlations in both groups
researched. The performance indicators of Brazilian and English companies were not affected in any
significant way, despite divergences between BR GAAP and US GAAP and between IFRS and US GAAP.
However, stands out as the main limitation that no company listed on Bovespa was found in the lists of
European stock exchanges, which was necessary in order to verify the differences in these companies’
indicators in the conversion of their accounting statements from BR GAAP to US GAAP and IFRS. This
required the adoption of an alternative (i.e., canonical correlations). The main implication of this study is
that the impact of IFRS adoption by Brazilian companies may be less than the expected, in terms of
improvement of accounting quality and cost of adoption. The article advances research on a
comparative study of the financial disclosures made according to Brazilian, American and international
accounting standards, supported by an analysis of performance indicators calculated from accounting
statements prepared from and based on these standards.