Do IFRS-driven exogenous changes in management control affect firm outcomes? We argue that the adoption of financial reporting standards leads to changes in management control systems (MCS) and that, in turn, regulation-driven exogenous variation in MCS affects firm performance. We examine this unexplored externality of accounting regulation by studying the adoption of revenue and operating lease recognition standards (IFRS 15 and IFRS 16). Our evidence, collected from interviews with key stakeholders as well as survey and archival data, confirms that the implementation of IFRS 15 and IFRS 16 led to changes in the design and use of MCS. We examine the consequences of these changes to MCS on firm performance using a difference-in-differences methodology in a large sample of companies worldwide. Our results show positive externalities of IFRS 15 and IFRS 16 adoption, via its impact on MCS. This adds to our understanding of the IFRS post-implementation reviews and cost-benefit analysis beyond financial reporting quality.