| Globalization is changing the landscape of the investment world. A shift away from national capital markets to global capital markets has led to a movement towards a set of globally accepted accounting standards, International Financial Reporting Standards (IFRS). Guided by the measurement perspective to accounting and financial market research and in line with the literature on fundamental analysis, this research built on the empirically tested notion that a firm's intrinsic equity value can be measured by examining accounting information such as growth, risk, and earnings as well as other non-accounting information sources. A transition to IFRS would have significant effects on those accounting information sources, specifically the financial statements. Since analysts have been identified as one of the primary users of the financial statements and their investment recommendations have been linked to investor behavior, an exploration of the effects of changes in the financial statements on analysts' fundamental analysis was warranted. More specifically, this study answered the call by scholars in the field for further research into the effects of IFRS adoption in the U.S. The purpose of this two-phase, sequential mixed methods study was to assess the effects of a transition to IFRS on the key financial indicators used by financial analysts in their analyses of publicly traded companies in the oil and gas production industry. The results identify the key financial indicators used by analysts in the industry, highlight the variations in the two sets of standards that result in significant differences in those indicators as calculated under both methods, and provide guidance for management's development of preparation efforts. |
