Cascino, Stefano, Clatworthy, Mark, Osma, Beatriz Garcia, Gassen, Joachim, Imam, Shahed and Jeanjean, Thomas (2016) The decision usefulness of financial accounting information : an experimental interview study of institutional investors. In: 39th EAA Annual Congress, Netherlands, Maastricht , 11-13 May 2016 (Unpublished)

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Abstract

The abandonment of a separate stewardship role in the IASB’s 2010 Conceptual Framework led to significant disquiet in the accounting community, yet empirical evidence on whether stewardship decisions require information with different properties to valuation decisions remains scarce. We conduct a large international face-to-face interview survey of 81 professional investors to investigate whether they assess accounting information differently under stewardship and valuation objectives and whether accounting data is implicated in managerial compensation. We find that professional investors whose objective is to value the firm consistently assess financial accounting information to be more relevant than those assessing the performance of management. In contrast, we find that the existence of accounting-based compensation arrangements has no clear effect on assessments of representational faithfulness of financial reporting information. Subsequent analyses show that the latter result seems influenced by professional investors’ views of preparers’ overall corporate governance as a key determinant of representational faithfulness. Our findings are relevant for standard setting in general and the current IASB Conceptual Framework for Financial Reporting deliberations in particular.

Item Type:	Conference Item (Paper)
Subjects:	H Social Sciences > HF Commerce > HF5601 Accounting
Divisions:	Faculty of Social Sciences > Warwick Business School > Accounting Faculty of Social Sciences > Warwick Business School
Library of Congress Subject Headings (LCSH):	International accounting standards board, Accounting -- Standards, Accounting firms, Corporate governance
Official Date:	February 2016
Dates:	Date Event February 2016 Accepted 2016 Submitted
Status:	Peer Reviewed
Publication Status:	Unpublished
Conference Paper Type:	Paper
Title of Event:	39th EAA Annual Congress
Type of Event:	Conference
Location of Event:	Netherlands, Maastricht
Date(s) of Event:	11-13 May 2016
Related URLs:	Organisation

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