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Financial reporting comparability: evidence on the impact of ambiguity tolerance and accounting standard guidance

Financial reporting comparability: evidence on the impact of ambiguity tolerance and accounting... In this study, we investigate whether the provision of formal guidance in the interpretation of ambiguous principles-based accounting standard provisions contributes to, or detracts from, financial reporting comparability. Analysing judgments made by Chinese accountants working in Beijing, Shanghai, and Guangzhou, our results highlight that the presentation of comparable financial information is hindered by the presence of guidance. These results suggest that if national and international comparability is desired, standard setting authorities should exercise caution when incorporating guidance into accounting standards. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Accounting, Auditing and Performance Evaluation Inderscience Publishers

Financial reporting comparability: evidence on the impact of ambiguity tolerance and accounting standard guidance

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1740-8008
eISSN
1740-8016
DOI
10.1504/IJAAPE.2011.042775
Publisher site
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Abstract

In this study, we investigate whether the provision of formal guidance in the interpretation of ambiguous principles-based accounting standard provisions contributes to, or detracts from, financial reporting comparability. Analysing judgments made by Chinese accountants working in Beijing, Shanghai, and Guangzhou, our results highlight that the presentation of comparable financial information is hindered by the presence of guidance. These results suggest that if national and international comparability is desired, standard setting authorities should exercise caution when incorporating guidance into accounting standards.

Journal

International Journal of Accounting, Auditing and Performance Evaluation – Inderscience Publishers

Published: Jan 1, 2011

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