Perceptions of external auditors, preparers and users of financial statements about the adoption of IFRS 8

evidence from Jordan

Ghassan Mardini, Louise Crawford, David Power

    Research output: Contribution to journalArticle

    5 Citations (Scopus)

    Abstract

    Purpose
    The objective of this study is to explore the perceptions of external auditors, preparers and users (investors and analysts) of financial statements in Jordan about this new segmental reporting standard; a decision usefulness framework underpins the research.

    Design/methodology/approach
    Semi-structured interviews were conducted with 9 external auditors, 6 preparers and 14 users of Jordanian listed companies’ financial statements.

    Findings
    The findings reveal that a majority of interviewees found that IFRS 8 was not a problematic standard, and that the management approach of IFRS 8 was an improvement on the previous standard - IAS 14R - because the information produced was seen as useful to users of financial statements. Moreover, the respondents indicated that there was an improvement in the quantity and quality of segmental information under IFRS 8 in annual reports for 2009; it was more understandable, relevant, reliable and comparable than the segmental information which had previously been reported.

    Research limitations/implications
    No attempt was made to assess the usefulness of segmental information reported under IFRS 8 by Jordanian listed companies in their annual reports for other groups such as lenders, suppliers, customers, trade creditors and the general public (IASC, 1989). Thus, a survey about the impact of IFRS 8 on other groups may yield further insights about the decision usefulness of the new standard’s disclosures. However, Jordanians are not familiar with such research instruments and the culture within the society is relatively secretive (Piro, 1998).

    Practical implications
    The findings of the current research should be valuable for international accounting standard setters at the IASB. It provides some indication about the impact of this new standard.

    Originality/value
    This research shows that segmental information reported under IFRS 8 is more useful for decision makers needs compared to segmental information that previously reported under IAS 14R. It also provides a great insight about the impact of this new segmental disclosure standard.
    Original languageEnglish
    Pages (from-to)2-27
    JournalJournal of Applied Accounting Research
    Volume16
    Issue number1
    DOIs
    Publication statusPublished - 2015

    Fingerprint

    External auditor
    Jordan
    International Financial Reporting Standards
    Financial statements
    Usefulness
    Annual reports
    Listed companies
    Disclosure
    Investors
    Analysts
    International Accounting Standards Board
    Suppliers
    Design methodology
    International accounting standards
    Quality of information
    Structured interview
    Decision maker

    Cite this

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    title = "Perceptions of external auditors, preparers and users of financial statements about the adoption of IFRS 8: evidence from Jordan",
    abstract = "PurposeThe objective of this study is to explore the perceptions of external auditors, preparers and users (investors and analysts) of financial statements in Jordan about this new segmental reporting standard; a decision usefulness framework underpins the research.Design/methodology/approachSemi-structured interviews were conducted with 9 external auditors, 6 preparers and 14 users of Jordanian listed companies’ financial statements.FindingsThe findings reveal that a majority of interviewees found that IFRS 8 was not a problematic standard, and that the management approach of IFRS 8 was an improvement on the previous standard - IAS 14R - because the information produced was seen as useful to users of financial statements. Moreover, the respondents indicated that there was an improvement in the quantity and quality of segmental information under IFRS 8 in annual reports for 2009; it was more understandable, relevant, reliable and comparable than the segmental information which had previously been reported.Research limitations/implicationsNo attempt was made to assess the usefulness of segmental information reported under IFRS 8 by Jordanian listed companies in their annual reports for other groups such as lenders, suppliers, customers, trade creditors and the general public (IASC, 1989). Thus, a survey about the impact of IFRS 8 on other groups may yield further insights about the decision usefulness of the new standard’s disclosures. However, Jordanians are not familiar with such research instruments and the culture within the society is relatively secretive (Piro, 1998).Practical implicationsThe findings of the current research should be valuable for international accounting standard setters at the IASB. It provides some indication about the impact of this new standard.Originality/valueThis research shows that segmental information reported under IFRS 8 is more useful for decision makers needs compared to segmental information that previously reported under IAS 14R. It also provides a great insight about the impact of this new segmental disclosure standard.",
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    Perceptions of external auditors, preparers and users of financial statements about the adoption of IFRS 8 : evidence from Jordan. / Mardini, Ghassan; Crawford, Louise; Power, David.

    In: Journal of Applied Accounting Research, Vol. 16, No. 1, 2015, p. 2-27.

    Research output: Contribution to journalArticle

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    AB - PurposeThe objective of this study is to explore the perceptions of external auditors, preparers and users (investors and analysts) of financial statements in Jordan about this new segmental reporting standard; a decision usefulness framework underpins the research.Design/methodology/approachSemi-structured interviews were conducted with 9 external auditors, 6 preparers and 14 users of Jordanian listed companies’ financial statements.FindingsThe findings reveal that a majority of interviewees found that IFRS 8 was not a problematic standard, and that the management approach of IFRS 8 was an improvement on the previous standard - IAS 14R - because the information produced was seen as useful to users of financial statements. Moreover, the respondents indicated that there was an improvement in the quantity and quality of segmental information under IFRS 8 in annual reports for 2009; it was more understandable, relevant, reliable and comparable than the segmental information which had previously been reported.Research limitations/implicationsNo attempt was made to assess the usefulness of segmental information reported under IFRS 8 by Jordanian listed companies in their annual reports for other groups such as lenders, suppliers, customers, trade creditors and the general public (IASC, 1989). Thus, a survey about the impact of IFRS 8 on other groups may yield further insights about the decision usefulness of the new standard’s disclosures. However, Jordanians are not familiar with such research instruments and the culture within the society is relatively secretive (Piro, 1998).Practical implicationsThe findings of the current research should be valuable for international accounting standard setters at the IASB. It provides some indication about the impact of this new standard.Originality/valueThis research shows that segmental information reported under IFRS 8 is more useful for decision makers needs compared to segmental information that previously reported under IAS 14R. It also provides a great insight about the impact of this new segmental disclosure standard.

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