Abstract
The main purpose of financial reporting is to provide information to user groups, such as providers of finance, investors, shareholders, and others, that will be useful for them in making economic decisions. Expectation gap has been known as one of the major topics for debate in accountancy, so this paper aims to find out whether such gap exists in terms of perception of the importance of the financial information qualitative characteristics (defined in Conceptual Framework) from the perspectives of two groups (auditors and public) involved in working with and using such information. To achieve the purpose of the given paper, a survey was conducted, the results of which were used in the statistical analysis which is shown in the next sections of the paper. The survey was responded by 32 auditors and 38 representatives of public with sufficient knowledge in finance and accounting. Results of the statistical analysis show that there is some difference between auditors and public in terms of the importance perception of several elements from the financial information qualitative characteristics.
Highlights
Financial reporting is important practice within the business and mainly known as a way of recording, analyzing and summarizing transactions that are carried out by a business either at certain point of time or over some period
This may lead to assumption: if usefulness of financial information is a matter of perception, it will be correct to assume that the importance level of each qualitative characteristic mentioned in the Conceptual Framework varies for those who work directly with such information and those who use it for decision making
Importance ranks of qualitative characteristics for “auditors” group and “public” group are summarized and presented in the table as well
Summary
Financial reporting is important practice within the business and mainly known as a way of recording, analyzing and summarizing transactions that are carried out by a business either at certain point of time or over some period. The concept of “quality” has been the topic for debate in the accounting practice and its importance can be justified by the fact that financial reporting quality is broad concept. It includes both financial and nonfinancial information that is significant for making decisions [5]. The information provided in the financial statements is useful if it has certain qualitative characteristics that are defined by the Conceptual Framework (see Fig. 1) At this point, one should understand that “usefulness” and previously mentioned “quality” are quite subjective concepts because perception of these concepts can vary significantly for people who work directly with financial information and for people who use this information for making economic decisions. This may lead to assumption: if usefulness of financial information is a matter of perception, it will be correct to assume that the importance level of each qualitative characteristic mentioned in the Conceptual Framework varies for those who work directly with such information and those who use it for decision making
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