Scholarly record
OPINION ON THE PAST RESEARCH ON RELIABILITY OF FINANCIAL STATEMENT - PRESENT POSITION AND PERSPECTIVES
Abstract
Reliability of financial statements is crucial when judging the relevance of financial information created in accounting information system. Although the importance of the problem has been raised many times in the literature, the matter has not been explored very well. Broadly admitting that financial reports should be reliable, there is limited literature on reliability definition. Few attempts to define reliability were based on conceptual framework created by International Accounting Standard Board. On the other hand, literature analysis presents the changes in the characterization of reliability formed on the transformation of scope and course of previous researches. Previous studies represent diverse collection and consist mainly of selected problems concentrating on earnings management. A few studies were directed at selected reliability determinants' investigation (maximum of 2 or 3 determinants in one study) in the context of financial reports' information quality. At the same time, very sophisticated methods of earning management are used in order to realize well-bred and complicated financial strategies that are hard to fairness judgment. Methods used in the article include worldwide literature analysis together with the study of accountancy theoretical background directed at earnings management. The qualitative mixed-methods are employed with broad emphasis on critical research, in-depth examinations of accountancy foundations, and interpretive techniques referring to smoothing of financial reports. The aim of the study is twofold. Firstly, authors present the review of previous literature on reliability of information disclosed in financial statements and describe the status of up-to-date researches. Secondly, the desired direction for the future research is indicated in the area of reliability characterization and reliability determinants' classifications. Our article contributes to understanding about fairness in accounting showing past confusions about characterization of the reliability and pinpointing future areas of reliability research.
Publication Impact Profile
Publication details
References15
Bowen R.M., Rajgopal S., Venkatachalam M., Accounting Discretion, Corporate Governance and Firm Performance, 14th Annual Conference on Financial Economics and Accounting, http://papers.ssrn.com/sol3/papers.cfm, 2005.
Dodwell L.C., The Determinations of Goodwill Impairment Write-offs under FASB ASC Topic 350 in Family Firms vs. Non-family Firms: Evidence from the S7P 500, http://gateway.proquest.com/34/43/3443945, 2011.
Doyle J. T., Ge W., McVay S., Accruals Quality and Internal Control over Financial Reporting, The Accounting Review, Vol. 82(5), pp. 1141-1170, 2007.
Erb C., Pelger Ch., “Twisting words”? A study of the construction and reconstruction of reliability in financial reporting standard-setting, Accounting. Organizations and Society, vol. 40, pp. 13-40, 2015.
Ghani Al.-Laith A. A., Adaptation of the Internal Control Systems with the use of Information Technology and its Effects on the Financial Statements Reliability: An Apllied Study on Commercial Banks, International Management Review, vol. 8, no. 1, pp. 12-20, 2012.
Healy P.M., Hutton A., Palepu K.G., Stock Performance and Intermediation Changes Surrounding Sustained Increases in Disclosure, Contemporary Accounting Research, Vol. 16, 1999.
Maines L. A., Wahlen J. M., The Nature of Accounting Information Reliability: Inferences from Archival and Experimental Research, Accounting Horizons, Vol. 20(4), pp. 399-425, 2006.
McKee Thomas E., Earnings Management: An Executive Perspective, Thomson, pp.1-15, 2005.
Moeinadin M., Heirany F., Khoshnood E., The effect of the reliability of accounting information on systemic risk on listed companies at Tehran Stock Exchange, International Journal of Academic Research in Economics and Management Sciences, Vol. 3 (1), pp. 1-11, 2014.
Othman H.B., Zeghal D., A Study on Earnings-Management Motives in the Anglo-American and Euro-Continental Accounting Models: The Canadian and French Cases.”The International Journal of Accounting” 41, pp. 406-435, 2006.
Piosik A.(eds.), Kształtowanie zysków podmiotów sprawozdawczych w Polsce. MSR/MSSF a Ustawa o rachunkowości, Wydawnictwo C.H. Beck, pp. 11-34, 2013.
Piosik A., Strojek-Filus M., An Assessment of the Application of Earnings Management Objectives and Instruments in Financial Reporting – Evidence of Survey Research Results, Scientific Annals of the “Alexandru Ioan Cuza” University of Iasi Economic Sciencies 60 (2), pp. 331-356, 2013.
Ramanna K., The Implications of Unverifiable Fair-Value Accounting evidence from the Political Economy of Goodwill accounting, Journal of Accounting and Economics, 45, http;//www.elsevier.com/locate/jae, 2008.
Schipper, K., Commentary on Earnings Management. Accounting Horizons (3), pp. 91-94, 1989.
Yanfang W. U., Introduction to the Influence of Accounting Measurement Attributes on Financial Information, Canadian Social Science, Vol. 9 (3), pp. 146-148, 2013.
View or Download full articleAccess options
SWS access login
Login as SWS Scientific CommitteeLogin as SWS Scientific PartnerLogin as SWS AuthorAuthors and approved SWS contributors will read and export their own linked papers after identity matching by SWS profile, email and SGEM GlobalID.
For librarian assistance: [email protected]
Purchase Instant Access
- Article can be downloaded after successful payment.
- Article may be used according to SWS library access terms.
- Article cannot be redistributed.
