School of Accountancy

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https://mro.massey.ac.nz/handle/10179/2539

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Browsing School of Accountancy by Subject "Financial statements"

Now showing 1 - 5 of 5
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    Aspects of the motivation for voluntary disclosures: evidence from the publication of value added statements in an emerging economy
    (2001) van Staden, C. J.
    This paper investigates the motivation for the voluntary disclosure of financial information by companies in their annual financial statements, by examining aspects of the usefulness of the value added statement. The value added statement is published voluntarily with the annual financial statements and is currently experiencing high levels of publication in South Africa, which is evidently brought about by the high political costs and significant legitimacy threats that companies operating in South Africa are facing. It was found from the literature and from a survey among management that the value added statement was primarily aimed at the employees. Employees have also been regarded as users of financial information in the literature. However, a survey among trade unions in South Africa found that almost no use is made of the value added statement even though the unions make use of other financial information. This indicates that voluntary disclosures do not necessarily satisfy the information needs of their intended audience. The research also indicates that the trade unions might not use the value added statement because they suspect that the statement is being used to reduce political costs and legitimacy threats, and is therefore not reliable. This is a major shortcoming of voluntary disclosures.
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    Has IFRS resulted in information overload?
    (2010) Morunga, M.; Bradbury, M. E.
    The move to NZ IFRS has been surrounded by complaints of too much information being provided. This is not simply a matter of the cost of providing the information, but the possibility of data overload. Data overload is an important issue as it impacts information search strategies and decision outcomes. This relevant for the current debate on differential reporting and for assessing whether NZ IFRS has achieved its goals of reducing the cost of financial analysis. The purpose of this paper is to examine the impact of the move to international financial reporting by New Zealand listed entities on the quantity of data provided in the annual report. Our analysis shows that the annual report increased for 92% of our sample firms. The average increase in size was 29% of the prior years‟ annual report and arose through notes to the accounts and accounting policies. Even after transitional information (e.g., accounting policies and reconciliations) the increase is 15%.
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    The potential effects of IFRS for SMEs on New Zealand SME financial reporting
    (2010) Morunga, Maria; Morunga, Maria
    No abstract
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    'True and fair view' versus 'Present fairly in conformity with generally accepted accounting principles'
    (2001) Kirk, N. E.
    The ‘true and fair view’ concept is one of two competing but not mutually exclusive legal standards for financial reporting quality that have been subject to debate on their meaning, use and importance. The other is ‘present fairly in conformity with generally accepted accounting principles’ (GAAP). While the former is closely identified with judgement and is used in the United Kingdom, the European Union, Singapore, Australia, and New Zealand, the latter is the standard for United States financial reporting and tends to be more rule based. This paper presents the findings of an empirical investigation of the ‘true and fair view’ in New Zealand. It reports the results of a survey of financial directors, auditors and shareholders of New Zealand listed companies investigating their perceptions of, and preferences for, ‘true and fair view’ versus other standards for financial statement reporting including ‘present fairly in conformity with generally accepted accounting principles’ (GAAP), 'fairly reflects' and 'present fairly', and compares the findings with relevant international research. The purpose of the research was twofold; firstly to determine if ‘within-group’ and ‘betweengroup’ differences in perceptions and preferences for the terms existed, thus contributing to an expectations gap; and, secondly, to examine whether or not the New Zealand respondents shared the preference for ‘true and fair view’ versus ‘present fairly in conformity with GAAP’ found in previous international research. The results show that a clear majority of all three groups share similar perceptions of the meaning of the 'true and fair view’ concept, and support its use in financial reporting. All groups preferred ‘true and fair view’ to other terms including ‘fairly present in conformity with GAAP’, a result consistent with previous comparisons of United Kingdom, and United States investors’ opinions. This illustrates that the 'true and fair view' concept remains an important international overall standard for financial reporting quality.
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    The value added statement: bastion of social reporting or dinosaur of financial reporting?
    (2001) van Staden, C. J.
    South Africa is at present experiencing the highest incidence of publication of the value added statement reported anywhere in the world to date. In addition research investigating the predictive ability of value added information has been conducted in the USA since 1990, even though the value added statement has not been published there. The research reported in this paper sets out to establish whether the value added statement is a disclosure worth considering by companies around the world, by investigating the South African experience with the value added statement. The social accounting theories of organisational legitimacy and political costs were found to be best suited to explain why the value added statement is published. Surveys among the companies publishing the value added statement indicated that management had the employees in mind when they published this information. However, a survey among users has indicated that very little use has been made of the value added statement. The main reason for this seems to be that the unregulated nature of the value added statement allows for inconsistencies in disclosures, which eventually caused users to suspect bias in the reports. The USA evidence that the information has additional predictive power is not confirmed by a South African study, and is complicated by the limited additional information contained in the value added statement. The South African experience with the value added statement does not make a convincing case for publication. Rather, it highlights the need for unbiased and verified social disclosures that will be useful to all the stakeholders of the company. In addition, it has implications for other voluntary social and environmental disclosures.