This paper examines the impact of adopting International Accounting Standards (IAS) on accounting quality and the cost of capital. The authors compare firms that adopt IAS with a matched sample of non-adopting firms to investigate whether IAS adoption is associated with predictable differences in accounting quality and cost of capital. They find that IAS-adopting firms exhibit less earnings management, more timely loss recognition, and higher value relevance of accounting data compared to non-adopting firms. Additionally, IAS-adopting firms show higher accounting quality after adoption, suggesting an improvement in accounting quality. While the evidence is weak, there is also some evidence that IAS-adopting firms may enjoy a lower cost of capital after adoption. The study suggests that IAS adoption leads to an improvement in accounting quality.This paper examines the impact of adopting International Accounting Standards (IAS) on accounting quality and the cost of capital. The authors compare firms that adopt IAS with a matched sample of non-adopting firms to investigate whether IAS adoption is associated with predictable differences in accounting quality and cost of capital. They find that IAS-adopting firms exhibit less earnings management, more timely loss recognition, and higher value relevance of accounting data compared to non-adopting firms. Additionally, IAS-adopting firms show higher accounting quality after adoption, suggesting an improvement in accounting quality. While the evidence is weak, there is also some evidence that IAS-adopting firms may enjoy a lower cost of capital after adoption. The study suggests that IAS adoption leads to an improvement in accounting quality.