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Financial Reporting Research: Relevance and Practice

Explore the relevance of financial reporting research to practical applications, new approaches by IASB, practitioner concerns, future implications, and corporate reporting effects. Engage with the IASB, understand obstacles, and academic events for better market information.

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Financial Reporting Research: Relevance and Practice

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  1. Financial reporting research – is it relevant to practice? Brian Singleton-Green Financial Reporting Workshop, Rome: 13-14 June 2013

  2. Is FR research relevant to practice? Obvious answers Obstacles The IASB’s new approach Four styles of standard setting The IASB, research and the future

  3. Is it relevant to practice? Obvious answers No

  4. AAA membership

  5. Is it relevant to practice? Obvious answers No Yes

  6. Practitioner concerns What should I do? (practice) What should we be required to do? (policy)

  7. Corporate reporting questions • Who uses corporate reporting? • What use do they make of it? • What other information do they use? • What are the effects of corporate reporting (effects ≠ uses)? • Eg, effects of different disclosures? • Effects of different forms of measurement? Answers will depend on context

  8. Is it relevant to practice? Obvious answers No Yes Depends

  9. Obstacles • Incomprehensible • Disagreements • Normative conclusions • Perceived irrelevance

  10. AAA membership: what happened? • Research changed • Practice changed

  11. The IASB’s new approach Feedback Statement: Agenda Consultation 2011 (December 2012)

  12. … the IASB should establish, or facilitate the establishment of, a dedicated research capability to provide leadership in the thinking about financial reporting

  13. “Priority research projects” • Emissions Trading Schemes • Business Combinations under Common Control • Discount Rates • Equity Method of Accounting • Intangible Assets; Extractive Activities; and Research & Development Activities • Financial Instruments with the Characteristics of Equity • Foreign Currency Translation • Non-financial Liabilities (amendments to IAS 37) • Financial Reporting in High Inflationary Economies

  14. Four styles of standard setting Codifying best practice Finding out what current practices are - Implementing a theory Doing what works Finding out what works - Doing what people want

  15. The IASB, research and the future

  16. IASB: motivations for change • The financial crisis • Unsuccessful projects • The end of convergence Credibility

  17. What the IASB means by “research” • Academic research • Staff research • Work

  18. The IASB and research: the future • More use of academic research • Will have to be positive results • Research is not a panacea • Change is reversible

  19. The long term • Engage with the IASB • Engage with practitioners • Create forums for interaction

  20. Information for Better Markets • Academic events • ICAEW lectures and conferences

  21. ICAEW lectures and conferences • “International Financial Reporting Standards (IFRS): pros and cons”, Ray Ball, Accounting and Business Research (2006) • Over 18,000 downloads from SSRN

  22. Information for Better Markets Conferences • London, 16-17 December 2013 • Reporting Financial Performance • Alfred Wagenhofer (Graz) • Charles Lee (Stanford) • Robert Libby (Cornell) • Steven Young (Lancaster)

  23. Information for Better Markets • Academic events • ICAEW lectures and conferences • Reports

  24. The long term • Engage with the IASB • Engage with practitioners • Create forums for interaction • Communication: clear, short and simple • Explain policy-relevance Impact

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