This paper investigates the effect of three factors on accounting quality within Europe: (1) capital markets environment; (2) influence exerted by insider ownership; (3) incentives and pressure from firm characteristics of listed firms after the mandatory adoption of IFRS by 2005. In particular, we examine earnings management constructs often used to assess accounting standards quality. We perform a multivariate regression analysis on 4836 United Kingdom, France and Germany firm-year observations, accounting data from 2006 to 2009. The main findings of this study are the following: first, the fact that the company belongs to the stock exchange index does not limit its earnings management, second, there is no evidence of an insider ownership effect on accounting quality in Europe. However, the additional tests for companies with a high percentage of shares held by insiders, suggest a low level of earning management. The different overall results for countries like UK, France and Germany indicate that different firms accounting incentives dominate accounting standards in determining accounting quality.

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IFRS,Accounting Quality,Firm-level characteristics