Yan JinFollow

Document Type


Degree Name

Doctor of Philosophy (PhD)



Program Name/Specialization



Lazaridis School of Business and Economics

First Advisor

Yan Jin

Advisor Role



In this dissertation, I include three essays regarding earnings forecasts, the DuPont analysis and tax expense, all using mandatory International Financial Reporting Standards (IFRS) adoption in Canada as a setting. In the first essay entitled “DuPont Analysis, Earnings Persistence and Return on Equity: Evidence from Mandatory IFRS Adoption in Canada”, I propose four new models to forecast one-year-ahead return on equity and change in return on equity based on prior research in the DuPont analysis and earnings persistence. I also examine whether the persistence of return on equity has improved since Canadian companies adopted IFRS in 2011.

In the second essay entitled “Information Content of Tax Expense and the Effect of IFRS Adoption on Tax Expense”, I examine the information content of tax expense about future profitability and the effect of IFRS adoption on tax expense. Prior studies (Lev and Nissim, 2004; Hanlon, 2005; Schmidt, 2006; Ayers et al., 2009) use estimated taxable income, book-tax differences and effective tax rates to investigate the relation between income taxes and future earnings. However, those estimated proxies contain measurement errors and might distort the relationship among variables. Tax expense including current, deferred and other income taxes is directly derived from a Compustat account with no estimation error. The main analysis and robustness tests show that tax expense contains more incremental information content about future profitability beyond pre-tax book income than estimated taxable income.

In the third essay entitled “Impact of IFRS Adoption, Value Relevance and Industry Effects: A Canadian Study”, I propose a new comparability index to examine the impact of IFRS adoption on the financial statements of firms from different industries. The study demonstrates that deemed cost of property, plant and equipment is the optional exemption that caused the most discrepancy among first-time IFRS adopters; and that only transitional adjustments related to income accounts are value relevant.

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Accounting Commons