DO INTERNATIONAL FINANCIAL REPORTING STANDARDS INFLUENCE STOCK RISK?

Abstract

The objective of this research work is twofold: to study what information explains the risk of the shares and to analyze whether the implementation of the International Financial Reporting Standards ( IFRS ) , carried out in the Spanish market in 2005, influences said information . Know what information accounting and/or macroeconomic accounting explains the risk of a stock. It is useful information for the businessman and the management professional, as it tells us which variables to observe to estimate the evolution of the risk and, consequently, the evolution of the cost of capital or update rate. The update rate is a very important variable in many financial decisions , and its value, which depends among other variables on risk, has a great influence on the decision. For this reason it is important that said rate be determined objectively , something especially difficult in small and medium-sized enterprises ( SMEs). Efficient management involves being able to anticipate future effects, act to capture positive effects and minimize negative effects. If we know which variables explain the risk, we will know which indicators to observe to analyze their behavior and predict what will happen in the future regarding the update rate . Rights Reserved © 2015 National Autonomous University of Mexico, Faculty of Accounting and Admi- nistration. This is an open access article distributed under the terms of the Creative Commons License CC BY-NC-ND 4.0.