The Usefulness of Financial Accounting Information: Evidence from the Field

• 成果类型: Article
• 署名作者: Cascino, Stefano; Clatworthy, Mark A.; Garcia Osma, Beatriz; Gassen, Joachim; Imam, Shahed
• 署名单位: University of London; London School Economics & Political Science; University of Bristol; Universidad Carlos III de Madrid; Humboldt University of Berlin; University of Warwick
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2019-1030
• 发表日期: 2021
• 页码: 73-102
• 关键词: investors assessments; incentive contracts; earnings management; measurement bases; BONUS SCHEMES; GAAP; analysts; BOARD; users; determinants

摘要

We examine how investment professionals assess the usefulness of financial accounting information depending on their information acquisition objectives and preparers' earnings management incentives. We conduct a survey experiment based on face-to-face interviews with investment professionals and document two main results. First, we find that, compared with investment professionals assigned a firm valuation objective, those assigned a managerial performance evaluation objective assess accounting information as significantly less useful. Second, we find no systematic evidence that preparers' earnings management incentives negatively affect investment professionals' assessments of accounting information usefulness. To elucidate this second finding, we conduct a large-scale follow-up online experiment. Our results continue to offer no support for the effect of earnings management incentives on investment professionals' assessments of accounting information usefulness, irrespective of preparers' corporate governance quality. Instead, we find that poor corporate governance, by itself, reduces the usefulness of accounting information to investment professionals.