Most recent issue published online for the International Journal of Accounting, Auditing and Performance Evaluation.

In search of the invisible user of financial statements and his information needs. The (non)sense of different standards for listed and non-listed companies

Diane Breesch; Joël Branson; Vicky Cole — 2011-12-01T23:20:50-05:00

In search of the invisible user of financial statements and his information needs. The (non)sense of different standards for listed and non-listed companies
Diane Breesch; Joël Branson; Vicky Cole
International Journal of Accounting, Auditing and Performance Evaluation, Vol. 8, No. 1 (2012) pp. 1 - 23
In more than 100 countries, listed companies prepare their financial statements using IFRS. For non-listed companies, the situation is less harmonised. One of the arguments in favour of this distinct approach is that financial statements of listed and non-listed companies attract different users. Empirical evidence to back up this assumption is, however, rare. This article contributes by empirically exploring whether this assumption is true based on a survey of 849 individuals. We found that users of financial statements of listed and non-listed companies differ in their reasons for using financial statements (professional or private), in their profession, in their experience and in their viewpoint (e.g., suppliers, investors, …). They also differ in the number of countries they are interested in and in the degree of detail they require. The different users are, however, interested in the same type of information. Furthermore, many users are interested in both types of company.

Implementing strategy through performance measurement: an empirical test

D.K. Malhotra; Russ Kershaw — 2011-12-01T23:20:50-05:00

Implementing strategy through performance measurement: an empirical test
D.K. Malhotra; Russ Kershaw
International Journal of Accounting, Auditing and Performance Evaluation, Vol. 8, No. 1 (2012) pp. 24 - 42
For years, researchers have suggested that the alignment of performance measurement systems with strategic goals can motivate managers to take actions that are consistent with a firm's strategy. Recently, various performance measurement systems (e.g., balanced scorecard) have been developed to promote strategy implementation. Kershaw (2001) developed a strategic control framework for examining how these systems can be used to implement strategy. The framework identifies the key linkages between strategy and managers' actions, as well as the performance measure characteristics that affect managers' effort allocation decisions. The purpose of this study is to empirically test some of the key variables identified in this strategic control framework. The results indicate that prioritising goals consistent with a firm's strategy and linking congruent incentives to responsive performance measures can positively affect managers' efforts. However, the results also show that a highly responsive secondary measure can divert managers' efforts from the firm's primary goals. Given the recent focus on performance measurement systems, such as the balanced scorecard, these findings highlight the importance of selecting the appropriate measures that will be used to indicate performance.

Assessing the value relevance of total comprehensive income under IFRS: an empirical evidence from European stock exchanges

Alain Devalle; Riccardo Magarini — 2011-12-01T23:20:50-05:00

Assessing the value relevance of total comprehensive income under IFRS: an empirical evidence from European stock exchanges
Alain Devalle; Riccardo Magarini
International Journal of Accounting, Auditing and Performance Evaluation, Vol. 8, No. 1 (2012) pp. 43 - 68
This paper compares the value relevance of the net income and the total comprehensive income reported under IFRSs. The total comprehensive income represents a key measure of the overall company performance, and it is extremely topical after the revision of the IAS 1. The paper aims at verifying whether the total comprehensive income is more value relevant than the net income. To this purpose, accounting and market data regarding companies listed on the UK, French, German, Spanish and Italian stock exchanges have been collected for the years 2005-2007. Valuation models have been used to assess the differences in value relevance by using total comprehensive income or net income. Findings show that total comprehensive income has not resulted in an unquestionable increase in value relevance compared with net income. This research contributes to defining the relevance of the total comprehensive income and to the international debate about which overall company performance should be reported in the IFRS financial statement.

Value relevance of alternative methods of accounting for actuarial gains and losses

Ana Isabel Morais — 2011-12-01T23:20:50-05:00

Value relevance of alternative methods of accounting for actuarial gains and losses
Ana Isabel Morais
International Journal of Accounting, Auditing and Performance Evaluation, Vol. 8, No. 1 (2012) pp. 69 - 90
In 2010, IASB published an exposure draft about defined benefit plans where it proposed to eliminate the deferred recognition of actuarial gains and losses. IASB aimed to make fundamental improvements to the recognition, presentation and disclosures of defined benefit plans by mid-2011. To shed light on the debate on the recognition of actuarial gains and losses of defined benefit plans, this paper investigates the value relevance of financial information under three alternative methods of recognising actuarial gains and losses allowed by IAS 19: employee benefits (2004): the profit or loss method, the equity recognition method and the corridor method. Findings suggest that the equity recognition method, i.e., the recognition of all actuarial gains and losses in equity, best reflects the market's valuation of actuarial gains and losses of defined benefit plans.

The mandatory adoption of IFRS on intangibles: upheaval or inertia? The case of France

Corinne Bessieux-Ollier; Marie Chavent; Vanessa Kuentz; Elisabeth Walliser — 2011-12-01T23:20:50-05:00

The mandatory adoption of IFRS on intangibles: upheaval or inertia? The case of France
Corinne Bessieux-Ollier; Marie Chavent; Vanessa Kuentz; Elisabeth Walliser
International Journal of Accounting, Auditing and Performance Evaluation, Vol. 8, No. 1 (2012) pp. 91 - 113
This paper examines the effects of mandatory adoption of IFRS on intangibles in the French environment where firms were unable to develop 'experience of international standards' before they became mandatory from 1 January 2005. The question we try to answer is the following: did the change of accounting standards concerning the intangibles lead to the upheaval announced in the French accounts or did it rather introduce a phenomenon of inertia on behalf of the firms trying to modify their financial statements at a minimal level? An innovative divisive hierarchical clustering method for firms was applied: the DIV method. The results indicate three clusters of firms, each affected differently by the transition. Only one cluster displays a significant change whereas the others are unaffected by the transition. The inertia phenomenon described by Nobes (2006), arguing that pre-IFRS accounting treatments could survive under IFRS, is thus confirmed.