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    Rights statement: This is an Accepted Manuscript of an article published by Taylor & Francis Group in Accounting and Business Research on 03/08/2015, available online: http://www.tandfonline.com/doi/abs/10.1080/00014788.2015.1044495

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The qualitative characteristics of financial information, and managers’ accounting decisions: evidence from IFRS policy changes

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The qualitative characteristics of financial information, and managers’ accounting decisions : evidence from IFRS policy changes. / Nobes, Christopher; Stadler, Christian.

In: Accounting and Business Research, Vol. 45, No. 5, 2015, p. 572-601.

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@article{6127f86c51a14b289356d8c08657c4ad,
title = "The qualitative characteristics of financial information, and managers{\textquoteright} accounting decisions: evidence from IFRS policy changes",
abstract = "This is the first empirical study that uses publicly available data to provide direct evidence about the role of the qualitative characteristics (QCs) of financial information in managements{\textquoteright} accounting decisions. Based on 40,895 hand-collected IFRS (International Financial Reporting Standards) policy choices on 16 topics made by 514 large firms of 10 jurisdictions in the period 2005–2011, we identify 204 reasons for policy changes. The majority of these refer to QCs from the conceptual framework of the standard-setter, in particular to relevance, faithful representation, comparability and understandability. Firms also frequently refer to transparency, which is not directly mentioned in the framework. Furthermore, we analyse the circumstances under which firms explain their policy changes in terms of improved quality. We hypothesise and find that QCs are more often referred to if the change relates to measurement (i.e. to a more important accounting policy decision). We also find that references to QCs are positively associated both with firm size and with a measure of a jurisdiction's transparency. This complements previous research by providing evidence that managers are, at the least, alert to QCs.",
keywords = "qualitative characteristics, IFRS, relevance, faithful representation, comparability, understandability, transparency",
author = "Christopher Nobes and Christian Stadler",
note = "This is an Accepted Manuscript of an article published by Taylor & Francis Group in Accounting and Business Research on 03/08/2015, available online: http://www.tandfonline.com/doi/abs/10.1080/00014788.2015.1044495 ",
year = "2015",
doi = "10.1080/00014788.2015.1044495",
language = "English",
volume = "45",
pages = "572--601",
journal = "Accounting and Business Research",
issn = "0001-4788",
publisher = "Routledge",
number = "5",

}

RIS

TY - JOUR

T1 - The qualitative characteristics of financial information, and managers’ accounting decisions

T2 - evidence from IFRS policy changes

AU - Nobes, Christopher

AU - Stadler, Christian

N1 - This is an Accepted Manuscript of an article published by Taylor & Francis Group in Accounting and Business Research on 03/08/2015, available online: http://www.tandfonline.com/doi/abs/10.1080/00014788.2015.1044495

PY - 2015

Y1 - 2015

N2 - This is the first empirical study that uses publicly available data to provide direct evidence about the role of the qualitative characteristics (QCs) of financial information in managements’ accounting decisions. Based on 40,895 hand-collected IFRS (International Financial Reporting Standards) policy choices on 16 topics made by 514 large firms of 10 jurisdictions in the period 2005–2011, we identify 204 reasons for policy changes. The majority of these refer to QCs from the conceptual framework of the standard-setter, in particular to relevance, faithful representation, comparability and understandability. Firms also frequently refer to transparency, which is not directly mentioned in the framework. Furthermore, we analyse the circumstances under which firms explain their policy changes in terms of improved quality. We hypothesise and find that QCs are more often referred to if the change relates to measurement (i.e. to a more important accounting policy decision). We also find that references to QCs are positively associated both with firm size and with a measure of a jurisdiction's transparency. This complements previous research by providing evidence that managers are, at the least, alert to QCs.

AB - This is the first empirical study that uses publicly available data to provide direct evidence about the role of the qualitative characteristics (QCs) of financial information in managements’ accounting decisions. Based on 40,895 hand-collected IFRS (International Financial Reporting Standards) policy choices on 16 topics made by 514 large firms of 10 jurisdictions in the period 2005–2011, we identify 204 reasons for policy changes. The majority of these refer to QCs from the conceptual framework of the standard-setter, in particular to relevance, faithful representation, comparability and understandability. Firms also frequently refer to transparency, which is not directly mentioned in the framework. Furthermore, we analyse the circumstances under which firms explain their policy changes in terms of improved quality. We hypothesise and find that QCs are more often referred to if the change relates to measurement (i.e. to a more important accounting policy decision). We also find that references to QCs are positively associated both with firm size and with a measure of a jurisdiction's transparency. This complements previous research by providing evidence that managers are, at the least, alert to QCs.

KW - qualitative characteristics

KW - IFRS

KW - relevance

KW - faithful representation

KW - comparability

KW - understandability

KW - transparency

U2 - 10.1080/00014788.2015.1044495

DO - 10.1080/00014788.2015.1044495

M3 - Journal article

VL - 45

SP - 572

EP - 601

JO - Accounting and Business Research

JF - Accounting and Business Research

SN - 0001-4788

IS - 5

ER -