The Relationship between Bankruptcy Prediction and the Quality of Accounting Profits Before and After the Introduction of the K－IFRS：Focusing on the KOSDAQ Market

[Purpose]This study diagnoses changes in the usefulness of accounting information before and after the introduction of the K－IFRS using the probability of corporate insolvency and financial stability indicator (P, Z－Score, K－Score) based on the bankruptcy prediction model used in previous studies. [Methodology]Prior to the introduction of the IFRS from 2002 to 2010 and from 2011 to 2019, using the corporate insolvency probability and financial stability indicator (P, Z－Score, K－Score) based on the bankruptcy prediction model used in previous studies for KOSDAQ companies. The differences are compared after the introduction of the IFRS up to 1 year. [Findings]Discretionary accruals increase as the probability of bankruptcy increases, and discretionary accruals decrease as the K－Score of the financial stability indicator increases. However, there is no difference before and after the introduction of the IFRS. As the probability of bankruptcy increases, the amount of conservatism increases, and as the K－Score of the financial stability indicator increases, the amount of conservatism is verified to decrease. In the evaluation of the quality of accounting profits based on conservatism only in K－Score, there is no significant difference before the introduction of the K－IFRS, but there is a difference after the introduction of the K－IFRS. [Implications]In evaluating the quality of accounting profits before and after the introduction of the K－IFRS, using data from KOSDAQ companies from 2002 to 2019, there is differentiation from previous studies according to empirical study results.