Creative Accounting and Investment Analyst Response

Taffler, Richard; Breton, Gaétan

doi:10.1080/00014788.1995.9729931

Cited by 81 publications

(52 citation statements)

References 19 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…4 Third, experimental studies explore how individual users process lease accounting information, in particular, whether they appear to be influenced by whether the information is recognized in the financial statements or merely disclosed in the footnotes to the accounts. The evidence is, however, very mixed (Wilkins andZimmer, 1983a and1983b;Munter and Ratcliffe, 1983;Hartman and Sami, 1989;Breton and Taffler, 1995;and Gopalakrishnan and Parkash, 1996;and Wilkins, 1984).…”

Section: Economic Consequencesmentioning

confidence: 99%

International lease-accounting reform and economic consequences: The views of U.K. users and preparers

Beattie

Goodacre

Thomson

2006

The International Journal of Accounting

View full text Add to dashboard Cite

In response to perceived difficulties with extant lease accounting standards in operation worldwide, the G4+1 issued a discussion paper which proposes that all leases should be recognized on the balance sheet (ASB, 1999). Leasing is now on the active agenda of the IASB. A major difficulty faced by standard setters lies in overcoming the preparer/user lobbying imbalance and obtaining ex ante evidence on the likely impact of regulatory reform. This paper contributes to the ongoing international debate by conducting a questionnaire survey of UK users and preparers to assess their views on proposals for lease accounting reform and on the potential economic consequences of their adoption. The results, based on 132 responses, indicate that both groups accept that there are deficiencies in the current rules, but they do not agree on the way forward and believe that the proposals would lead to significant economic consequences for key parties. The impact on respondents' views of familiarity with the proposals, level of lease usage, and company size, is also examined.

show abstract

Section: Economic Consequencesmentioning

confidence: 99%

International lease-accounting reform and economic consequences: The views of U.K. users and preparers

Beattie

Goodacre

Thomson

2006

The International Journal of Accounting

View full text Add to dashboard Cite

show abstract

“…They also noted that lenders are more likely than managers/preparers to regard disclosed obligations as debt. Breton and Taffler (1995) conducted a laboratory experiment using UK investment analysts to investigate their response to nine forms of creative accounting, one of which was non-capitalised leases. In general, the analysts did not make adjustments when calculating familiar financial ratios.…”

Section: Does It Really Matter?mentioning

confidence: 99%

Assessing the potential impact of lease accounting reform: a review of the empirical evidence*

Goodacre

2003

Journal of Property Research

View full text Add to dashboard Cite

SummaryAccounting standard-setters have proposed that the right to use assets (including land and buildings) acquired under operating lease contracts should be recognised on the balance sheet of lessee companies. In recent years, several empirical research studies have investigated the potential impact of the proposed changes in accounting for leases. The current paper reviews this work and presents some new evidence, for a property audience.The paper summarises evidence that operating leases represent a major source of finance for many companies generally, and more specifically for companies in the retail sector. Recognition of operating leases on the lessee's balance sheet would have a significant impact on performance measures, especially gearing. If markets are informationally 'efficient' such changes should have little impact. However, research evidence on efficiency with respect to lease accounting information is mixed. What's more, company managers do not believe that the market is efficient so are likely to behave as if the markets are 'inefficient'. Possible reactions include reduced use of leasing, shorter lease contract terms, more break clauses, or increased use of contingent rental agreements. It seems likely that lessors will be under pressure to bear greater risks.

show abstract

“…Various surveys show that the notes to financial statements are important to professional equity investors (e.g., Clatworthy, 2005;Fülbier, Niggemann and Weller, 2008;Gassen and Schwedler, 2010;Marton, 1998;Olbert, 1994), but the extent to which professional investors conduct detailed analyses of accounting data seems surprisingly low (Barker, 2000;Breton and Taffler, 1995). In addition, analysts' interpretation and use of earnings information is not always based on a complete understanding of accounting issues of recognition and measurement.…”

Section: Information Sources Used By Professional Equity Investorsmentioning

confidence: 99%

Who Uses Financial Reports and for What Purpose? Evidence from Capital Providers

Cascino

Clatworthy

Osma

et al. 2014

Accounting in Europe

View full text Add to dashboard Cite

We review the academic literature on the use of financial reporting information by capital providers. We classify our findings by investor type and by information objective. While most capital providers use accounting information, our survey indicates that they do so in a variety of ways with financial reporting information competing with other sources of information. We also find that information intermediaries are influential in both credit and equity markets, making the identification of a typical target 'user' inherently difficult. Our main findings question the underlying objective of the Conceptual Framework to guide the development of standards for general-purpose financial statements to provide a typical knowledgeable investor with a true and fair view about the reporting entity. Finally, we identify gaps in the literature and suggest areas where future research can help inform important academic and policy debates.

show abstract

Creative Accounting and Investment Analyst Response

Cited by 81 publications

References 19 publications

International lease-accounting reform and economic consequences: The views of U.K. users and preparers

International lease-accounting reform and economic consequences: The views of U.K. users and preparers

Assessing the potential impact of lease accounting reform: a review of the empirical evidence*

Who Uses Financial Reports and for What Purpose? Evidence from Capital Providers

Contact Info

Product

Resources

About