Desktop Review of Ifrs Compliance, Disclosure and Relevance of Financial Statements as Perceived by Investors with Regards to their Decision Making
Keywords:
IFRS compliance; disclosure of financial statements; relevance of financial statements; investorsAbstract
The objective of financial statements as according to the Conceptual Framework is that financial statements are prepared so as to provide useful information for decision making to their users. However, there has been a growing dissatisfaction with financial statements and disclosures particularly shown by investors. The aim of this desktop research is to investigate IFRS compliance, disclosure and relevance of financial statements as perceived by investors with regards to their decision making. The research findings according to literature reviewed showed that investors still perceive financial statements to be useful and relevant in their decision making. There is need for companies to maintain credibility and reliability of financial statements and also ensuring quality disclosures so as to best provide investors with relevant information for decision making.
References
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ACCA, 2014. The future of financial reporting 2014: re-questioning some old assumptions.
Alvarez, F. and Barlevy, G. 2015. Mandatory disclosure and financial contagion, National Bureau of Economics Research, Cambridge.
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Atkinson, A. 2002. Ethics in financial reporting and the corporate communication professional, Corporate Communications: An International Journal, Vol 7, no 4, pp. 212-218.
Awolowo, I., Garrow, N., Clark, M. and Chan, D. 2018. Accounting Scandals: Beyond Corporate Governance, Journal of Modern Accounting and Auditing, Vol. 14, No. 8, pp 399-407.
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Barlevy, G. 2018. Bridging Between Policymakers’ and Economists’ Views on Bubbles, Economic Perspectives, Vol. 42, No. 4.
Baruch, L. 2018. The deteriorating usefulness of financial report information and how to reverse it, Accounting and Business Research, 48:5, pp 465-493
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Cheng, L., Liao, S. and Zhang, H. 2013. The commitment effect versus information effect of disclosure – evidence from smaller reporting companies. The Accounting Review, Vol 88(4), pp 1239-1263.
Choi, T. & Pae, J. 2011. Business ethics and financial reporting quality: Evidence from Korea. Journal of Business Ethics, Vol 103, pp 403-427.
Cho, C.H., Freedman, M. and Patten, D.M. 2012. Corporate Disclosure of Environmental Capital Expenditures: A Test of Alternative Theories. Accounting, Auditing & Accountability Journal, Vol 25, pp 486-507.
Choy, L.T, 2014, The strengths and weaknesses of Research Methodology comparison and complimentary between Qualitative and Quantitative Approaches, Journal of Humanities and Social Science, Vol 19, No 4, pp 99-104.
Clem, M. (2015). Financial Statements.
Conceptual Framework for Financial Reporting, 2018.
Dandago, K. and Hassan, N. 2013. Decision Usefulness Approach to Financial Reporting: A Case for Malaysian Inland Revenue Board, Asian Economic and Financial Review, Vol. 3, No. 6, pp. 772-784.
Dimitropoulos, PE. and Asteriou, D. 2010, The value relevance of financial statements and their impact on stock prices, Managerial Auditing Journal, Vol 24, no 3, pp 248-265.
Duru, A. N. 2012. Elements of financial accounting made easy. Enugu-Nigeria: Joglas Production Works Ltd.
Dye, R.A. 2017. Optimal disclosure decisions when there are penalties for nondisclosure, The RAND Journal of Economics, 48: pp 704-732.
Financial reporting Council (FRC), 2010. The UK Approach to Corporate Governance, London Grant, G.H. 2003. The Evolution of Corporate Governance and Its Impact on Modern Corporate America. Management Decision, 41, 923-934.
Heffler, E. 2013. Global financial reporting joint effort needed to tackle disclosure. Financial Executives, April. Retrieved from www.financial executives.org
Hellman, N., Carenys, J. and Gutierrez, S. 2018. Introducing More IFRS Principles of Disclosure – Will the Poor Disclosers Improve? Accounting in Europe, Vol 15:2, pp 242-321,
Heppner, P., Wampold, B. Owen, J., Thompsons, M. and Wang, K., 2016. Research design in counseling, 4th ed, Cengage Learning, USA
Khan, A., Azli, M., Ismail, Azizi, N., Mardani, Abbas, Zavadskas, Edmundas, Kaklauskas, Arturas. 2017. Empirical research of users’ opinions on selected aspects in internet financial reporting. Economy management. 20. pp 146-162.
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Leuz, C. and Wysocki, P., 2015. The economics of disclosure and financial reporting regulation: Evidence and suggestions for, IGM Working Paper No 132, Booth Working Paper Series No.16-03.
Lev, B. and Gu, F. 2016. The End of Accounting and the Path Forward for Investors and Managers.
Liesegang, TJ. and Bartley, GB., 2014, Towards transparency of financial disclosure, American Academy of Ophthalmology, Elsevier.
Liou, M. 2008 Fraudulent Financial Reporting Detection and Business Failure Prediction Models: A Comparison, Managerial Auditing Journal, 23, 650-662.
Makkawi, B. and Schick, A. 2003. Are Auditors Sensitive Enough to Fraud? Managerial Auditing Journal, Vol 18, pp 591-598.
Mbawuni, J. 2019. Assessing Financial Reporting Quality of Listed Companies in Developing Countries: Evidence from Ghana. International journal of economics and finance, Vol 11, pp 29.
McCusker K. and Gunaydin S. 2015. Research using qualitative, quantitative or mixed methods and choice based on the research. Perfusion. pp 537-542.
Miihkinen, A, 2008, Efficiency of authoritative disclosure recommendations, Journal of Financial Regulation and Compliance, vol 16, no 4, pp. 384-413.
Miihkinen, A, 2013, “The usefulness of firm risk disclosures under different firm riskiness, investors interest and market conditions”, Advanced in Accounting, Incorporating Advances in International Accounting, vol 29, pp.312-331.
Morunga, M. & Bradbury, M. 2012. The Impact of IFRS on Annual Report Length. Australasian Accounting, Business and Finance Journal (AABFJ) Vol 6 (5), pp 47 – 64.
Morris, R., Gray, S., Pickering, J. & Aisbitt, S. 2014. Preparers ‘perceptions of the costs and benefits of IFRS: Evidence from Australia’s implementation experience. Accounting Horizons, Vol 28(1), pp 143-173.
Nicoline, Y., 2013. The Importance of financial statement, A Research Project at National Polytechnic, Bamenda.
Osadchy1, A., Akhmetshin, M., Amirova, F., Bochkareva4, N., Gazizyanova, Y. and Yumashev, V., 2018, Financial Statements of a Company as an Information Base for Decision-Making in a Transforming Economy European Research Studies, Journal Volume XXI, Issue 2, pp. 339-350.
Palea, V, 2014, “Fair value accounting and its usefulness to financial statement users”, Journal of Financial Reporting and Accounting, vol 12, no 2, pp 102-116.
Patrick, Z., Tavershima, A. and Eje, E., 2017, Effect of Financial Information on Investment Decision Making By Shareholders of Banks in Nigeria, IOSR Journal of Economics and Finance, Volume 8, Issue 3, pp 20-31.
Pilcher, R, 2005, Local government financial key performance indicators not so relevant, reliable and accountable, International Journal of Productivity and Performance Management, vol 54, no 5/6, pp 451-467.
Qu, W, Leung, P and Cooper, B, 2013, A Study of Voluntary disclosure of listed Chinese firms- a stakeholder perspective, Managerial Auditing Journal, vol 28, no 3, pp. 261-294.
ACCA, 2014. The future of financial reporting 2014: re-questioning some old assumptions.
Alvarez, F. and Barlevy, G. 2015. Mandatory disclosure and financial contagion, National Bureau of Economics Research, Cambridge.
Alzarouni, Abdulkareem, Aljifri, Khaled, Ng, Chew, Tahir, Iqbal, 2012. The Usefulness of Corporate Financial Reports: Evidence from the United Arab Emirates. Accounting & Taxation, Vol. 3, No. 1, pp. 17-37.
Atkinson, A. 2002. Ethics in financial reporting and the corporate communication professional, Corporate Communications: An International Journal, Vol 7, no 4, pp. 212-218.
Awolowo, I., Garrow, N., Clark, M. and Chan, D. 2018. Accounting Scandals: Beyond Corporate Governance, Journal of Modern Accounting and Auditing, Vol. 14, No. 8, pp 399-407.
Barker, R., Barone, E., Birt, J., Gaeremynck, A. McGeachin, A. Marrton, J. and Moldovan, R. 2013. Response to the EAA FRSC to the EFRAG/ANC/FRC discussion paper: Towards a disclosure framework for the notes. Accounting in Europe, Vol. 10(2), pp 1-26.
Barlevy, G. 2018. Bridging Between Policymakers’ and Economists’ Views on Bubbles, Economic Perspectives, Vol. 42, No. 4.
Baruch, L. 2018. The deteriorating usefulness of financial report information and how to reverse it, Accounting and Business Research, 48:5, pp 465-493
CFA Institute, 2013. Financial Reporting Disclosure: Investor Perspectives on Transparency, Trust, and Volume.
Cheng, L., Liao, S. and Zhang, H. 2013. The commitment effect versus information effect of disclosure – evidence from smaller reporting companies. The Accounting Review, Vol 88(4), pp 1239-1263.
Choi, T. & Pae, J. 2011. Business ethics and financial reporting quality: Evidence from Korea. Journal of Business Ethics, Vol 103, pp 403-427.
Cho, C.H., Freedman, M. and Patten, D.M. 2012. Corporate Disclosure of Environmental Capital Expenditures: A Test of Alternative Theories. Accounting, Auditing & Accountability Journal, Vol 25, pp 486-507.
Choy, L.T, 2014, The strengths and weaknesses of Research Methodology comparison and complimentary between Qualitative and Quantitative Approaches, Journal of Humanities and Social Science, Vol 19, No 4, pp 99-104.
Clem, M. (2015). Financial Statements.
Conceptual Framework for Financial Reporting, 2018.
Dandago, K. and Hassan, N. 2013. Decision Usefulness Approach to Financial Reporting: A Case for Malaysian Inland Revenue Board, Asian Economic and Financial Review, Vol. 3, No. 6, pp. 772-784.
Dimitropoulos, PE. and Asteriou, D. 2010, The value relevance of financial statements and their impact on stock prices, Managerial Auditing Journal, Vol 24, no 3, pp 248-265.
Duru, A. N. 2012. Elements of financial accounting made easy. Enugu-Nigeria: Joglas Production Works Ltd.
Dye, R.A. 2017. Optimal disclosure decisions when there are penalties for nondisclosure, The RAND Journal of Economics, 48: pp 704-732.
Financial reporting Council (FRC), 2010. The UK Approach to Corporate Governance, London Grant, G.H. 2003. The Evolution of Corporate Governance and Its Impact on Modern Corporate America. Management Decision, 41, 923-934.
Heffler, E. 2013. Global financial reporting joint effort needed to tackle disclosure. Financial Executives, April. Retrieved from www.financial executives.org
Hellman, N., Carenys, J. and Gutierrez, S. 2018. Introducing More IFRS Principles of Disclosure – Will the Poor Disclosers Improve? Accounting in Europe, Vol 15:2, pp 242-321,
Heppner, P., Wampold, B. Owen, J., Thompsons, M. and Wang, K., 2016. Research design in counseling, 4th ed, Cengage Learning, USA
Khan, A., Azli, M., Ismail, Azizi, N., Mardani, Abbas, Zavadskas, Edmundas, Kaklauskas, Arturas. 2017. Empirical research of users’ opinions on selected aspects in internet financial reporting. Economy management. 20. pp 146-162.
Korableva, O., Kalimullina, O. and Kurbanova, E., 2017b., Building the monitoring systems for complex distributed systems: Problems & solutions. Paper presented at the ICEIS 2017 - Proceedings of the 19th International Conference on Enterprise Information Systems, 2, pp221-228.
Kumar, R. 2019. Research Methodology: A Step-by-Step Guide for Beginners, Sage.
Lafarge Cement Zimbabwe, 2015 – 2018, Annual Reports.
Leuz, C. and Wysocki, P., 2015. The economics of disclosure and financial reporting regulation: Evidence and suggestions for, IGM Working Paper No 132, Booth Working Paper Series No.16-03.
Lev, B. and Gu, F. 2016. The End of Accounting and the Path Forward for Investors and Managers.
Liesegang, TJ. and Bartley, GB., 2014, Towards transparency of financial disclosure, American Academy of Ophthalmology, Elsevier.
Liou, M. 2008 Fraudulent Financial Reporting Detection and Business Failure Prediction Models: A Comparison, Managerial Auditing Journal, 23, 650-662.
Makkawi, B. and Schick, A. 2003. Are Auditors Sensitive Enough to Fraud? Managerial Auditing Journal, Vol 18, pp 591-598.
Mbawuni, J. 2019. Assessing Financial Reporting Quality of Listed Companies in Developing Countries: Evidence from Ghana. International journal of economics and finance, Vol 11, pp 29.
McCusker K. and Gunaydin S. 2015. Research using qualitative, quantitative or mixed methods and choice based on the research. Perfusion. pp 537-542.
Miihkinen, A, 2008, Efficiency of authoritative disclosure recommendations, Journal of Financial Regulation and Compliance, vol 16, no 4, pp. 384-413.
Miihkinen, A, 2013, “The usefulness of firm risk disclosures under different firm riskiness, investors interest and market conditions”, Advanced in Accounting, Incorporating Advances in International Accounting, vol 29, pp.312-331.
Morunga, M. & Bradbury, M. 2012. The Impact of IFRS on Annual Report Length. Australasian Accounting, Business and Finance Journal (AABFJ) Vol 6 (5), pp 47 – 64.
Morris, R., Gray, S., Pickering, J. & Aisbitt, S. 2014. Preparers ‘perceptions of the costs and benefits of IFRS: Evidence from Australia’s implementation experience. Accounting Horizons, Vol 28(1), pp 143-173.
Nicoline, Y., 2013. The Importance of financial statement, A Research Project at National Polytechnic, Bamenda.
Osadchy1, A., Akhmetshin, M., Amirova, F., Bochkareva4, N., Gazizyanova, Y. and Yumashev, V., 2018, Financial Statements of a Company as an Information Base for Decision-Making in a Transforming Economy European Research Studies, Journal Volume XXI, Issue 2, pp. 339-350.
Palea, V, 2014, “Fair value accounting and its usefulness to financial statement users”, Journal of Financial Reporting and Accounting, vol 12, no 2, pp 102-116.
Patrick, Z., Tavershima, A. and Eje, E., 2017, Effect of Financial Information on Investment Decision Making By Shareholders of Banks in Nigeria, IOSR Journal of Economics and Finance, Volume 8, Issue 3, pp 20-31.
Pilcher, R, 2005, Local government financial key performance indicators not so relevant, reliable and accountable, International Journal of Productivity and Performance Management, vol 54, no 5/6, pp 451-467.
Qu, W, Leung, P and Cooper, B, 2013, A Study of Voluntary disclosure of listed Chinese firms- a stakeholder perspective, Managerial Auditing Journal, vol 28, no 3, pp. 261-294.
Published
2021-10-11
How to Cite
Wadesango, N. (2021). Desktop Review of Ifrs Compliance, Disclosure and Relevance of Financial Statements as Perceived by Investors with Regards to their Decision Making: Array. Acta Universitatis Danubius. Œconomica, 17(5). Retrieved from https://dj.univ-danubius.ro/index.php/AUDOE/article/view/1379
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Business Administration and Business Economics
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