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Measurement Of Financial Reporting Quality Based On Ifrs Conceptual Framework’S Fundamental Qualitative Characteristics

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  • Alexios KYTHREOTIS

    (European University Cyprus, Cyprus)

Abstract

The IASB creates the standards and the conceptual framework in an attempt to create higher quality financial statements. Through this article, the extent to which this objective has been achieved is examined. An important characteristic of this research is the fact that the quality of financial statements is examined in light of the Conceptual Framework. Specifically, the two fundamental qualitative characteristics - relevance and faithful representation (reliability) - set by the IAS Committee through the Conceptual Framework are examined. Additionally, this article highlights the conflict between the existing methods for measuring reliability and the faithful representation, as defined by the Conceptual Framework. The degree of relevance and reliability is measured by the usage of four alternative regression models. The sample of this research consists of listed companies of fifteen European countries that have adopted IFRS mandatorily and the time horizon that is investigated is 10 years, from 2000 until 2009. Specifically, the period between 2000 and 2004 is defined as the period before the adoption, while the period between 2005 and 2009 is defined as the period after the adoption. Generally, the findings that are obtained support an increase in relevance, while the reliability seems to be unchanged. Journal: European Journal of Accounting, Finance and Business

Suggested Citation

  • Alexios KYTHREOTIS, 2014. "Measurement Of Financial Reporting Quality Based On Ifrs Conceptual Framework’S Fundamental Qualitative Characteristics," European Journal of Accounting, Finance & Business, "Stefan cel Mare" University of Suceava, Romania - Faculty of Economics and Public Administration, West University of Timisoara, Romania - Faculty of Economics and Business Administration, vol. 2(3), pages 4-29, October.
    • Handle: RePEc:scm:ejafbu:v:2:y:2014:i:3:p:4-29
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    File URL: http://www.accounting-management.ro/index.php?pag=showcontent&issue=5&year=2014
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    Citations

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    Cited by:

    1. Mirela Elena Nichita & Marcel VULPOI, 2016. "Relationship between risk and transparency in the financial statements of professional services entities," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 14(137), pages 540-540, April.
    2. Faozi A. Almaqtari & Abdulwahid Hashid & Najib H. S. Farhan & Mosab I. Tabash & Waleed M. Al‐ahdal, 2022. "An empirical examination of the impact of country‐level corporate governance on profitability of Indian banks," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 1912-1932, April.
    3. Albana Gjoni-Karameta & Elona Fejzaj & Ahmad Mlouk & Kristina Sila, 2021. "Qualitative Characteristics of Financial Reporting: An Evaluation According to the Albanian Users’ Perception," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 10, November.
    4. Akisik, Orhan & Gal, Graham, 2023. "IFRS, financial development and income inequality: An empirical study using mediation analysis," Economic Systems, Elsevier, vol. 47(2).
    5. Nichita Mirela, 2018. "Enhancing quality of information through risk reporting in financial statements," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 12(1), pages 671-682, May.
    6. David Okelue Ugwunta & Boniface Uche Ugwuanyi, 2019. "Accounting Conservatism and Performance of Nigerian Consumer Goods Firms¡¯: An Examination of the Role of Accruals," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(1), pages 1-9, January.
    7. D. Balios & I. Basiakos & N. Eriotis & P. Kotsilaras & E. Thalassinos, 2021. "Financial Reporting Quality before and after the Greek Accounting Standards Adoption using NiCE Qualitative Characteristics Measurement Perspective of Competencies Towards Uniformity in Family Busines," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 11(2), pages 28-41.

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